According to Business Insider, Microsoft CEO Satya Nadella is personally driving a sweeping, urgent AI transformation he views as a generational shift, mandating executives to either fully commit to the intense workload or leave. Nadella recently promoted sales chief Judson Althoff to CEO of the commercial business to free up his own time to focus on technical AI work, and has started weekly “AI accelerator” meetings where only lower-level technical employees can speak to avoid top-down leadership. Insiders report that longtime Office and Windows boss Rajesh Jha is mulling retirement, with LinkedIn CEO Ryan Roslansky as a potential successor after his role was expanded in June 2024 to include Outlook, Word, and Excel. Newly appointed CoreAI product president Asha Sharma says the pace of AI innovation has forced Microsoft to completely rethink its decades-old software development “assembly line” model, as the company shifts from saying it’s in the “early innings” to the “middle innings” of the AI era.
Nadella’s Burning Platform
Here’s the thing: this isn’t just another corporate initiative. Nadella is framing this as an existential moment, on par with the shift to cloud computing. He’s telling his VPs they need to work like “Individual Contributors” again—constantly learning and unlearning. That’s a huge cultural shift for a company of Microsoft‘s size and maturity. The fact that he’s having those “commit or leave” conversations with top execs tells you he’s dead serious. He’s basically betting his legacy on this.
And you can see why the urgency is so palpable. The pace of change is insane. Asha Sharma pointed out that big foundation model releases went from every six months, to every six weeks. When the underlying technology is evolving that fast, your entire product development cycle has to warp to match it. If you’re still building software the old way, you’re already obsolete. Nadella’s push to hear directly from the “trenches” in those messy weekly meetings is a direct attempt to short-circuit bureaucracy and tap into that frantic startup energy he keeps hearing about.
The Inevitable Leadership Shakeup
Now, when a CEO starts talking like this, leadership changes are inevitable. The rumors around Rajesh Jha retiring make perfect sense. He’s a veteran of the old Windows and Office empires—products that were built for a completely different era of computing. Bringing in someone like Ryan Roslansky from LinkedIn, who has experience running a more agile, cloud-native service, signals a desire to inject that DNA into the core productivity suite.
But it’s fascinating that even Jha reportedly has a “newfound excitement” about AI. That’s the power of a platform shift. It can re-energize veterans or make them realize their time is up. Charlie Bell in cybersecurity is another name in the rumor mill. This isn’t about performance, necessarily. It’s about whether these leaders have the stamina and the mindset for what Nadella calls the “mountain of work” ahead. Not everyone wants to climb that.
What a “New Production Function” Actually Means
This is the most radical part. Sharma’s explanation that “AI breaks” the traditional software assembly line is huge. For decades, scaling software meant scaling engineers, managers, and budgets linearly. AI agents change that calculus. The marginal cost of creating new features or insights plummets.
So what do you do with all those engineering hours you’re not spending on brute-force coding? You spend them on “judgment, taste, and problem-solving,” as Sharma says. That’s a profound shift. It means the value moves even further up the stack—from writing code to defining the right problem and crafting the perfect user experience. It also puts immense pressure on legacy business models. If your competitor can build and iterate 10x faster for 10x less, how do you compete? Microsoft is trying to reinvent itself before someone else does it to them.
Look, this kind of whole-company reinvention is incredibly hard. Most big tech firms talk a big game about transformation, but get bogged down in internal politics and old revenue streams. Nadella seems to be pulling every lever he has: structural changes, leadership pressure, and cultural rhetoric. He’s clearing the deck for what he believes is the final, defining act of his tenure. The question is, can a 200,000-person giant really move with the intensity and pace of a startup? Satya’s betting everything that it can.
