Microsoft made a trio of announcements this week that are going to be very important for how the company approaches its big AI bet in 2025. It started off by creating a new AI engineering group to focus its developers on building an AI platform and tools for both Microsoft and its customers. Microsoft then announced pay-as-you-go agents for its relaunched Copilot Chat for businesses, and it finished the week by bundling Office AI features into Microsoft 365 for consumers and raising the subscription price.

All three of these announcements are linked to Microsoft’s insatiable hunger to win at AI. The company still prioritizes security through employee performance reviews, but it increasingly feels like promoting AI is an equally high priority.

The new engineering group is a good example of Microsoft’s priorities. Led by former Meta engineering chief Jay Parikh, the new CoreAI – Platform and Tools division will combine Microsoft’s Dev Div and AI platform teams together. Microsoft CEO Satya Nadella described the reorganization as “entering the next innings of this AI platform shift” and said it will “reshape all application categories.” Nadella has regularly said that the pace of...

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