In his annual letter, Microsoft CEO Satya Nadella announced a significant corporate reorganization for what he calls the “Super Intelligence” era. The strategy centers on AI agents, model choice and more affordable computing.
Microsoft plans to focus on custom chips, PCs that can run models locally and new tools to manage AI agents.
The company’s latest 10-K report disclosed its first workforce reduction in a decade. Layoffs primarily affected middle management and non-technical roles.
The cost-optimization measures come as capital expenditures rise, particularly for AI infrastructure. CFO Amy Hood projects that spending will increase significantly by 2026.