How a Windows shake-up could position Microsoft to capitalize on AI PCs

After Windows and Surface chief Panos Panay left Microsoft last year, the software giant immediately split its two divisions into two separate teams. This was a move designed to motivate Windows engineers to focus on more web and AI features under Mikhail Parakhin, who was previously responsible for Bing and ads. does not make sense.

Six months after that setback, Windows and Surface are back together under a new leader, following frustrations from Microsoft's top levels. The shuffle comes just as Microsoft is gearing up for a big “AI PC” push.

Pavan Davuluri, who is currently in charge of Surface hardware, will now lead both Windows and Surface. DeepMind co-founder Mustafa Suleiman, who was recently appointed by Microsoft CEO Satya Nadella, will now take charge of the company's consumer AI as CEO of Microsoft AI. Suleiman's appointment is a significant acknowledgment that something was not working with the Windows and AI shake-up six months ago.

Microsoft CEO Satya Nadella disappointed with Windows Web split.
Image: Microsoft

Nadella placed Suleiman above Parakhin in Microsoft's organization chart. Parakhin took over some of Windows engineering after Panay's departure last year, working closely on Bing Chat and several Microsoft Edge features. Parakhin's official title was CEO of Advertising and Web Services at Microsoft, so if he had remained in his position he would have been a CEO, reporting to the Microsoft AI CEO, who reported to the actual Microsoft CEO. That's a lot of CEOs, and Microsoft usually reserves the CEO position for big acquisitions like LinkedIn or GitHub, or for big divisions like Microsoft Gaming.

Instead, Parakhin is leaving his current position and “has decided to explore new roles,” according to an internal memo obtained by Microsoft. the verge, He will report to Kevin Scott, the previous face of Microsoft's AI efforts during the transition phase. But it seems that Parakhin will be leaving Microsoft soon.

It's a surprising turn of events for a leader who just six months ago a source described to me as one of the “fastest-rising leaders in the company.” Parakhin was responsible for Microsoft's reborn advertising business and all of the company's advertising-based consumer businesses. It is a large organization of over 10,000 people, but some people were disappointed with the way it was being managed. bloomberg Earlier this week it was reported that Nadella was also growing impatient with Parkhin's team.

One employee, who wishes to remain anonymous, tells me that the culture of the Web Experience team led by Parakhin was different from the rest of Microsoft, often resulting in micromanaging and “crazy deadlines” for projects. It has been described as a culture of being forced to do more with less.

Hopefully we'll see less of these Bing pop-ups in Windows.
Screenshot by Tom Warren/The Verge

The Windows and Web Experience (WWE) team that Parakhin oversaw for a while also developed the malware-like Bing pop-ups we've seen in Windows recently. Microsoft is also aggressively pushing Edge in Windows, offering a number of tricks to get users to switch away from Chrome or use Edge's shopping and AI features.

I'm personally hoping that Microsoft will end these tactics and focus on making Microsoft Edge a better browser for them instead of cheating consumers. It will now be up to Microsoft AI CEO Mustafa Suleiman, as his team continues to handle the company's consumer-facing AI products like Copilot, Bing, and Edge.

Hopefully the return of Windows and Surface under the same leadership will also bring some much-needed clarity to Microsoft's AI efforts for Windows. Microsoft is slowly unveiling more AI-powered features in Windows, and emphasizing the need for “AI PCs” with neural processing units, but it hasn't coherently explained why any of this It matters.

Davuluri, the new Windows and Surface chief, is experienced when it comes to combining the hardware and software that Microsoft needs to get it right in this new era of AI. Davuluri has worked at Microsoft for more than 23 years and has been at the center of Surface engineering. He was deeply involved in the company's work with Qualcomm and AMD to create custom Surface processors.

While it seemed like the Surface hardware might be sidelined after Microsoft shuffled its hardware portfolio amid layoffs last year, it's encouraging to see Microsoft focusing on hardware and software for Windows under Davuluri.

Microsoft's Surface Pro 10 for business is one of the company's first AI PCs.
Image: Microsoft

It seemed as if Microsoft's Windows future was tied to hardware just before the pandemic began in 2020, and the rollercoaster of laptop sales over the past few years has clearly influenced how Nadella envisions the new era of AI. How to position windows. There was a brief period of trying something new after Panay left, but now it feels like Surface and Windows are back together where they belonged.

Now it's up to Microsoft to explain why consumers should care about AI PCs, and define what they are beyond catchy marketing jargon, which includes the CoPilot key on the keyboard. Pavan Davuluri has spent the past six months focused on leading Microsoft's silicon efforts, with the company expected to launch Arm-powered versions of its Surface Pro 10 and Surface Laptop 6 at an event on May 20.

This could be a major turning point for Windows and Microsoft's relationship with Intel. While Microsoft has used custom Qualcomm-powered chips for its Surface devices in the past, there has always been an Intel option for consumers. It appears that Microsoft has more confidence in Qualcomm's latest Snapdragon Elite

It's a big change for Microsoft's hero Surface devices, and Davuluri will be at the center of it. If Snapdragon Microsoft won't have the luxury of abandoning Intel in the same way as Apple did with the transition to its own silicon, but by only shipping Surface consumer devices on Arm, it's putting a new line in the silicon sand. Is.

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