Microsoft AI investments, new divisions show direction of company

Tech behemoth Microsoft is putting billions into AI in 2025, and one of the first projects it’s looking at is a company division focused on developers.

That division, “CoreAI - Platform and Tools,” is being led by new hire EVP Jay Parikh, formerly global head of engineering at Facebook. In an internal note on Jan. 13, CEO Satya Nadella wrote that Microsoft has expansive plans for the sector.

Those plans include building out AI agentic applications, “a new AI-first app stack,” and connecting existing Microsoft platforms, products, and affiliates like Azure and GitHub. In order to link all that work together, Nadella continued, the company created CoreAI.

Names and numbers. CoreAI is expected to integrate with the other engineering divisions at Microsoft, Nadella wrote. Parikh will work alongside CTO Kevin Scott and other top Microsoft executives.

Nadella added that Microsoft expects its cloud infrastructure business to continue to grow and become the largest part of the company. That tracks with an announcement earlier in the month, on Jan. 3, that Microsoft is investing $80 billion in 2025 “to build out AI-enabled data centers to train AI models and deploy AI and cloud-based applications around the world.”

Such an investment is sure to make waves in a burgeoning tech industry where AI is driving global growth. Microsoft’s play for a larger market share is part of an overall shift by major companies, including Amazon, Google, and Meta, to throw $300 billion in capital expenditures at AI in the next year.

As Business Insider reported in November, the companies “are in a multi-year investment cycle of epic proportions.” A contemporaneous note from Morgan Stanley predicted that the “high and rising capex numbers again speak to the importance of continued disclosure about new/incremental adoption, engagement, and revenue opportunities each of the four companies are seeing and investing in.”