NADELLA DISMANTLES MICROSOFT'S LEGACY STRUCTURE FOR AI RACE

Internal documents and sources reveal Nadella's sweeping reorganization of Microsoft's executive ranks. Mehdi, who has served the company since the Windows 3.1 era, will depart after the next fiscal year. The leadership shake-up signals Microsoft's strategic pivot toward AI competition. By adopting a startup-style operating structure, the company aims to increase agility and innovation—priorities that traditional corporate hierarchies may hinder. Mehdi's exit marks a significant changing of the guard at a company known for retaining long-tenured executives. His three decades at Microsoft spanned multiple product cycles, from operating systems to cloud services and most recently Copilot initiatives. The reorganization comes as Microsoft faces intensifying competition from AI-focused startups and rivals like OpenAI and Google. Nadella's structural changes suggest the company is willing to dismantle established frameworks to accelerate decision-making and product development in the AI era. Separately, Activision Blizzard shareholders reached a $250 million settlement over allegations that Microsoft underpaid them during its 2023 acquisition.