Microsoft is reshaping its organisational structure to reflect the growing influence of artificial intelligence, replacing its three traditional reporting segments with two new divisions: “Agents and Infra” and “Devices and Consumer.”
The move is the latest indication of how deeply AI is changing the way one of the world’s largest technology companies operates—and, in typically Microsoft fashion, comes with a new set of corporate terminology.
Two Divisions, One Microsoft
According to reports, Microsoft will retire its existing segments—Productivity and Business Processes, Intelligent Cloud, and More Personal Computing—in favour of the simplified two-part structure.
“Agents and Infra” will bring together the company’s AI models, GitHub, Azure cloud infrastructure and Microsoft 365, including its growing suite of Copilot-powered features.
“Devices and Consumer,” meanwhile, will encompass Windows and Xbox, as well as Microsoft’s search and advertising businesses, including Bing and LinkedIn.
While the new structure broadly reflects Microsoft’s strategic priorities, the boundaries between the divisions are not always immediately obvious. Microsoft 365, for instance, is housed under “Agents and Infra,” while Windows sits within “Devices and Consumer,” despite the close relationship between the two products.
From ‘One Microsoft’ to Two
The restructuring also marks another chapter in Microsoft’s long-running effort to bring its sprawling businesses closer together.
During Steve Ballmer’s tenure, the company promoted the concept of “One Microsoft’s”, aimed at reducing internal silos and encouraging greater collaboration. Satya Nadella, who succeeded Ballmer, continued that effort while placing cloud computing and AI at the heart of Microsoft’s strategy. Now, the company remains “One Microsoft”—but its internal map has been redrawn around two distinctly AI-era categories.
Microsoft has also developed a reputation for its distinctive internal vocabulary. Terms such as “dogfooding,” referring to employees using the company’s own products, became part of mainstream technology jargon. Other expressions, such as “accountability margin” in place of the more conventional “profit margin,” remain largely Microsoft-specific.
AI Division Set to Dominate Revenue
The financial implications of the restructuring are significant. According to reports, Agents and Infra is expected to generate roughly $75 billion in revenue in the first quarter of next year, compared with approximately $15 billion for Devices and Consumer. The numbers underscore where Microsoft’s sees its future: increasingly in AI, cloud infrastructure and software platforms built around intelligent agents.
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