How Microsoft quietly reinvented itself to build better AI

CTO Kevin Scott, AI CEO Mustafa Suleyman, and other top execs share how an accelerator, code generation, and bespoke models and agents are transforming the way Microsoft makes software.

[Source images: Cristina Arias/Cover/Getty Images; Adobe Stock]

Kevin Scott is a maker. Given that he’s been Microsoft’s CTO for almost a decade, that doesn’t come as a shock. But his passion for making stuff extends to two hobbies—pottery and woodworking—that he pursues in a studio he built in Los Gatos, California. Large and lavishly outfitted, it’s packed with the tools of all his trades: a gas-powered kiln and a full woodshop, but also an office bedecked in computing equipment. On any given day, he may spend 9 or 10 hours there on video calls related to his day job.

Scott’s studio/office sits in a sleepy neighborhood more evocative of Mayberry than Silicon Valley in all its hard-charging glory. (There’s even a barber shop across the street.) When I dropped by recently, he showed me some of his handiwork, along with tech projects such as the infrared radiometer he devised to read carbon monoxide and carbon dioxide emissions from his kiln’s chimney. More to the point of my visit, he was quick to draw parallels between the craftsmanship he pursues on his own time and the massive shift the software industry is currently going through.

“When I was a little kid, there was this debate about your legitimacy as a woodworker if you used power tools instead of exclusively making things with hand tools,” he remembers. “People believed that hand tools were superior and led to a higher-quality product. It was a raging debate.”

By contrast, today’s software engineers are being pragmatic about their own extraordinary new power tool: generative AI.

“People more clearly understand that it’s just a tool,” Scott says. “And it’s not a particularly useful tool unless you have someone asking it to do a useful thing in a useful way.” Already, one study says that 42% of developers are using the technology to generate at least half their code.

Microsoft’s understanding of what people want out of AI has outsize impact on the entire world of software. Some 71% of developers work in its Visual Studio Code environment, according to a recent Stack Overflow survey. More than 225 million programmers—users of Microsoft and non-Microsoft coding tools alike—store their work on GitHub, which the company acquired in 2018. Its developer constituencies are dwarfed by the user bases of general-purpose platforms such as Microsoft 365 (more than 500 million users) and Windows 11 (a billion plus).

How AI is changing Microsoft’s products and how it’s changing the company itself are inextricably linked. Back in the 1980s, Microsoft coined the term “Eat your own dog food,” which became widely used across the industry to refer to a company using the products it creates. Lately, some people replace it with the less pungent “Drink your own champagne,” but the idea remains the same: You can’t build great products unless you have a personal investment in how they operate in real life.

That has never been truer than with generative AI, a technology the entire industry is still figuring out how to make palatable and profitable. Thanks to its prescient investment in OpenAI, Microsoft got off to a strong start. Yet when I spoke to CEO Satya Nadella for a 2023 Fast Company feature, he cautioned against reading too much into that momentum: “As far as I’m concerned, early leads in technology don’t matter.”

As if to prove his point, the OpenAI partnership soon grew increasingly fraught. More recently, their agreement has undergone revisions that make it less central to Microsoft’s AI future. The company hasn’t been forced to start over, exactly. But last year, it began constructing a more disciplined, independent strategy for how it would build AI and deliver it to customers.

“We had these different places where we were all kind of doing bits and pieces of this on our own, in our own worlds,” says Jacob Andreou, the executive VP for Copilot. “The last year and a half has been a story of stitching all of that together.” (I spoke with him and other executives during a visit to Microsoft’s Redmond, Washington, headquarters, a much less idyllic setting than a pottery studio.)

Andreou’s own time at Microsoft reflects this shift. A former Snap executive and Greylock partner, he came aboard in February 2025 to work on the consumer version of Copilot. At the time, that version had its own team and road map, distinct from those of the edition for business users.

A little over a year later, the company reshuffled its AI leadership to facilitate creating a single Copilot “super app,” similar to the unified experiences offered by OpenAI’s ChatGPT and Anthropic’s Claude. Andreou now oversees this app. (Various aspects of it are in private preview and available to members of Microsoft’s Frontier program, with no date announced for general availability.)

Charles Lamanna, a 13-year Microsoft veteran, also got a new job as part of the organization, becoming Executive VP of Microsoft Copilot, Agents, and Platform. (At Microsoft, like many large companies, trying to suss out who’s in charge of what from titles can be a brain teaser.) Recently called out in a profile by The Information’s Aaron Holmes as a possible eventual Microsoft CEO, Lamanna declares that the new app “will be the end of ‘Copilot-palooza’”—the period, currently winding down, when there have been many, many products called Copilot. How they relate to each other may not be clear to anyone without a desk in Redmond.

With the new app, “There’s one Copilot for your personal life and your work life,” Lamanna says. “There’s one Copilot across Chat, Code, Cowork, and Autopilot. There’s one Copilot that shows up in Word, Excel, PowerPoint. It may have different UIs on it, but it’s all the same Copilot behind the scenes. Kind of like how I have Outlook on my PC and I have Outlook on my phone. They’re different apps that look different, but they connect to my same inbox.”

Copilot’s consumer version had been the domain of DeepMind and Inflection AI cofounder Mustafa Suleyman, who joined Microsoft as CEO of Microsoft AI in 2024. He now oversees the development of cutting-edge in-house AI, a necessity given........

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