After Windows and Surface chief Panos Panay departed Microsoft<\/a> last year, the software giant quickly split his two divisions into two different teams. It was a move designed to push Windows engineers to focus on more web and AI features under Mikhail Parakhin, who was previously responsible for Bing and ads. It didn\u2019t work out.<\/p>\n<\/div>\n Six months after that shake-up, Windows and Surface are back together under a new leader, following frustrations from the very top of Microsoft. The shuffling comes just as Microsoft gets ready for a big \u201cAI PC\u201d push.<\/p>\n<\/div>\n Pavan Davuluri, who\u2019s currently in charge of Surface hardware, will now lead both Windows and Surface<\/a>. Mustafa Suleyman, the DeepMind co-founder who Microsoft CEO Satya Nadella just hired<\/a>, will now take over the company\u2019s consumer AI push as the CEO of Microsoft AI. The hiring of Suleyman is a key admission that something wasn\u2019t working out with the Windows and AI shake-up from six months ago.<\/p>\n<\/div>\n Nadella placed Suleyman above Parakhin in Microsoft\u2019s organization chart. Parakhin had taken on parts of Windows engineering after Panay\u2019s departure last year, and he had been working closely on Bing Chat and several Microsoft Edge features. Parakhin\u2019s official title was CEO of advertising and web services at Microsoft, so if he remained in his position then he would have been a CEO, reporting to the Microsoft AI CEO, who reports to the actual Microsoft CEO. That\u2019s a lot of CEOs, and Microsoft typically reserves CEO titles for big acquisitions like LinkedIn or GitHub, or for big divisions like Microsoft Gaming.<\/p>\n<\/div>\n Instead, Parakhin is leaving his current position and \u201chas decided to explore new roles\u201d according to a Microsoft internal memo obtained by The Verge<\/em>. He will report to Kevin Scott, the previous face<\/a> of Microsoft\u2019s AI efforts, during a transition phase. But it sounds like Parakhin will be leaving Microsoft soon.<\/p>\n<\/div>\n It\u2019s a surprise turn of events for a leader who one source described to me as one of the \u201cfastest rising leaders in the company\u201d just six months ago. Parakhin was responsible for Microsoft\u2019s reborn advertising business and all of the company\u2019s ad-based consumer businesses. It\u2019s a big organization of more than 10,000 people, but some were frustrated with the way it was being managed. Bloomberg<\/em> reported<\/a> earlier this week that Nadella was growing impatient with Parakhin\u2019s team, too.<\/p>\n<\/div>\n One employee, who wishes to remain anonymous, tells me that the web experiences team that Parakhin led had a different culture from the rest of Microsoft that often resulted in micromanaging and \u201cinsane deadlines\u201d for projects. It\u2019s been described as a culture of being forced to do more with less.<\/p>\n<\/div>\n The Windows and Web Experiences (WWE) team that Parakhin briefly oversaw also developed the malware-like Bing pop-ups<\/a> we\u2019ve seen appear in Windows recently. Microsoft has also been aggressively pushing Edge in Windows, with lots of tricks<\/a> to get users to move away from Chrome or use Edge\u2019s shopping<\/a> and AI features.\u00a0<\/p>\n<\/div>\n I\u2019m personally hoping that Microsoft ends these tactics and focuses on making Microsoft Edge a better browser for consumers instead of tricking them into using it. That will now be down to Microsoft AI CEO Mustafa Suleyman, as his team will continue to handle the company\u2019s consumer-facing AI products like Copilot, Bing, and Edge.<\/p>\n<\/div>\n Windows and Surface returning under one leader should hopefully bring some much-needed clarity to Microsoft\u2019s AI efforts for Windows, too. Microsoft has been gradually unveiling more AI-powered features in Windows, and pushing the need for \u201cAI PCs\u201d<\/a> with neural processing units, but it hasn\u2019t coherently explained why any of this matters.<\/p>\n<\/div>\n The new Windows and Surface chief, Davuluri, is experienced when it comes to the combination of hardware and software that Microsoft needs to get right in this new era of AI. Davuluri has worked at Microsoft for more than 23 years and has been at the heart of Surface engineering. He was deeply involved in the company\u2019s work with Qualcomm and AMD<\/a> to create custom Surface processors.<\/p>\n<\/div>\n While it looked like Surface hardware could get sidelined after Microsoft changed up its hardware portfolio<\/a> amid layoffs last year, it\u2019s encouraging to see Microsoft return to a focus on hardware and software for Windows under Davuluri.<\/p>\n<\/div>\n Microsoft\u2019s Windows future looked like it was tied to hardware<\/a> just before the pandemic began in 2020, and the rollercoaster of laptop sales over the past few years has clearly had an impact on how Nadella positions Windows in a new era of AI. There was a brief period of trying something new after Panay departed, but now it feels like Surface and Windows are back together where they belong.<\/p>\n<\/div>\n Now it\u2019s up to Microsoft to explain why consumers should care about AI PCs, and define exactly what they are beyond a flashy marketing term that involves a Copilot key<\/a> on a keyboard. Pavan Davuluri has spent the past six months focused on leading Microsoft\u2019s silicon efforts, with the company expected to launch Arm-powered versions of its Surface Pro 10 and Surface Laptop 6 at an event on May 20th<\/a>.<\/p>\n<\/div>\n This could be a huge turning point for Windows and Microsoft\u2019s relationship with Intel. While Microsoft has experimented with custom Qualcomm-powered chips for its Surface devices in the past, there has always been an Intel option for consumers to fall back on. Microsoft appears to have much more confidence in Qualcomm\u2019s latest Snapdragon Elite X processors, because I understand it\u2019s about to only offer these chips to consumers on an OLED version of the Surface Pro 10.<\/p>\n<\/div>\n That\u2019s a big change for Microsoft\u2019s hero Surface device, and Davuluri will have been at the center of it. If the performance of the Snapdragon X Elite is greatly improved and Microsoft\u2019s app emulation efforts are solid, we could be about to witness an Arm transition for Windows laptops that has been years in the making. Microsoft won\u2019t have the luxury of dropping Intel in quite the same fashion as Apple did with its transition to its own silicon, but by only shipping Surface consumer devices on Arm, it\u2019s putting down a new line in the silicon sand.<\/p>\n<\/div>\n<\/div>\n