Satya Nadella Steps Up as AI Product Overseer Amid Copilot Performance Issues

Microsoft CEO reportedly expresses dissatisfaction with Copilot's AI integration with Gmail and Outlook

Microsoft CEO Satya Nadella has openly criticized the integration performance of the company's AI assistant, Copilot, especially its connection with email platforms such as Gmail and Outlook. According to PYMNTS, which cited a report by The Information, Nadella personally reviewed the product and has demanded accelerated improvements from the engineering team. In a letter sent to the Copilot engineering group, Microsoft described the current integration as "mostly unusable" and "not smart enough." A manager on the team responded by comparing the situation to Google's Gemini AI, which reportedly integrates more effectively with Google Cloud Drive. Sources reveal that Nadella holds weekly hour-long meetings to closely monitor the team's progress, maintaining a serious and focused atmosphere. Business Insider has previously reported that Nadella set up a Microsoft Teams channel with about 100 technical staff to question the performance of underperforming AI products and encourage frontline employees to contribute feedback. This approach reflects Nadella's broader view of AI as essential to Microsoft's survival and a necessary driver of generational transformation within the company. To support this transformation, Nadella is pushing through comprehensive organizational restructuring that accelerates AI research and product development. He is also demanding a clear commitment to this vision from senior executives, signaling that those unwilling to fully support the AI-driven changes will be asked to leave. As part of the strategy to sharpen Microsoft's AI focus, Nadella appointed Judson Althoff as head of the Commercial Business Group. Althoff will keynote at the 2025 Ignite conference, marking the first time Nadella will not appear as a keynote speaker at the event. Additionally, Rolf Harms, credited with leading Microsoft's cloud business transformation, has been named AI economic policy advisor to help the company rethink business models amid its expanding AI initiatives.

Microsoft CEO Satya Nadella steps up as AI product overseer amid Copilot adoption challenges: report

Microsoft (MSFT) CEO Satya Nadella is said to have become highly active in an internal Teams channel for roughly 100 of Microsoft's top technical staff, posting extensively when he believes AI products are falling short. Nadella runs a weekly hour-long Nadella runs meetings, offers direct feedback, sets directives, and is highly active in technical discussions reversing shortcomings in AI products. Microsoft faces competition as Google's Gemini chatbot outperforms aspects of Microsoft's Copilot; there are concerns that AI revenue may lag investment. Nadella is personally recruiting, offering high salaries, and targeting talent from top AI labs like OpenAI and Google DeepMind.

Microsoft CEO Pushes Staff on Copilot Ambitions | PYMNTS.com

By completing this form, you agree to receive marketing communications from PYMNTS and to the sharing of your information with our sponsor, if applicable, in accordance with our Privacy Policy and Terms and Conditions. That's according to a report Monday (Dec. 22) from The Information, citing an in-house email reviewed by the publication. That message was from Nadella to Microsoft engineers working on a consumer version of the company's artificial intelligence (AI) assistant Copilot. A manager on the email thread pointed out Google Gemini's progress in connecting that chatbot to Google Drive for certain tasks. Nadella, however, seemed unhappy with the way Microsoft's version of that technology had performed thus far, saying that the company's programs for connecting Copilot with Gmail and Outlook "for [the] most part don't really work" and are "not smart," the report added. A spokesperson for Microsoft declined to comment when reached by PYMNTS. According to The Information, the last few months have seen the CEO become Microsoft's "most influential product manager," telling employees in September that he would delegate some duties as he focused more on the company's AI products. Sources told the news outlet that Nadella has become active in an internal Teams channel for roughly 100 of Microsoft's top technical staff, posting often when he thinks AI products are falling short. He also holds a weekly hourlong meeting with many of those same workers, grilling them about their jobs, said a source who had listened to those meetings. "He wants to minimize his distractions to stay focused on what Microsoft needs to do for AI," said Madrona Venture Group managing partner S. Somasegar, a former Microsoft executive and friend of Nadella. In other Microsoft news, PYMNTS wrote Monday about the company's views on AI in the banking sector following a recent blog post in which it argued that financial services firms are entering a decisive phase in AI adoption. Within that phase, the company argued, success is less about experimentation and more to do with reconfiguring core business processes around agentic AI. Microsoft points to an IDC study it had commissioned that showed that firms that embed AI agents but still keep humans in the loop are seeing returns on AI investments roughly three times greater than slower adopters. "Microsoft identifies five predictors for AI success in 2026: anchoring AI initiatives to value creation, building AI fluency across the workforce, expanding innovation across multiple business functions, embedding responsible AI and regulatory readiness as competitive advantages, and modernizing data foundations to support scale. The company also spotlighted "real-world examples, from insurers using AI agents to resolve large volumes of customer calls autonomously to banks investing heavily in skilling programs that drive daily AI usage," PYMNTS added.

Microsoft CEO Satya Nadella is unhappy with Copilot's AI performance, here's why

Nadella has reportedly stepped back from other executive duties to focus squarely on accelerating Microsoft's AI roadmap. Microsoft CEO Satya Nadella is reportedly dissatisfied with the company's AI Copilot. This comes after Nadella expressed internal concerns about the speed and quality of the company's progress on consumer-facing artificial products, particularly the Copilot assistant. According to The Information, Nadella expressed frustration in an internal email exchange with Copilot engineers, implying that some of the platform's core integrations are falling short of expectations. According to the report, the discussion began when the manager mentioned Google Gemini's growing ability to connect with Google Drive for productivity tasks. In contrast, Nadella reportedly criticised Microsoft's own efforts to integrate Copilot with services such as Gmail and Outlook, claiming that the functionality was unreliable and lacked intelligence in real-world use. It should be noted that Microsoft has not confirmed the development, but the report does state that Nadella has taken a more active role in shaping the company's AI strategy. In recent months, the CEO has already positioned himself at the centre of product decisions, particularly those involving artificial intelligence, which remains a key pillar of Microsoft's long-term growth strategy. Also read: Apple reportedly facing technical challenges in making a crease-free foldable iPhone The report cited internal sources and claimed that Nadella has become deeply involved in internal discussions, actively participating in a private Teams channel with approximately 100 senior technical leaders. He will also reportedly hold weekly meetings with engineers to question them about product performance, timelines, and execution in order to accelerate AI development. The previous report stated that Nadella told the employees that he would step back from some executive responsibilities to concentrate more directly on AI initiatives. Former Microsoft executive and Madrona Venture Group partner S. Somasegar told the publication that Nadella is deliberately reducing distractions to maintain focus on what the company must deliver in AI.