Embrace AI or leave: Microsoft CEO to company's top executives
21 Dec 2025

Microsoft CEO Satya Nadella has issued a stark ultimatum to the company's top executives: either fully embrace the ongoing artificial intelligence (AI) transformation or leave.

The directive comes as part of an aggressive internal shift aimed at preventing long-term irrelevance.

According to internal documents and employee interviews, Nadella sees AI as both Microsoft's biggest opportunity in decades and a potential existential threat if the company fails to move fast enough.

Conversations with senior executives
Executive discussions

Nadella has been conducting direct, one-on-one talks with senior executives to assess their readiness for the intensity and workload of Microsoft's next phase.

These conversations have been described as urgent and uncompromising.

One executive even said that the pressure has made long-serving leaders question their future at Microsoft amid such massive changes.

Nadella's vision for Microsoft's AI transformation
Strategic shift

Nadella believes that small changes won't suffice and wants Microsoft to act like an AI-native company. This may involve dismantling long-standing management habits and hierarchies.

Executives uncomfortable with this reality are being encouraged to make a choice rather than slow the transformation.

The approach is already changing how Microsoft operates, with Nadella restructuring the leadership team to focus more on technical work.

Focus on AI-driven product development
Leadership changes

Judson Althoff has been promoted to CEO of Microsoft's commercial business, allowing Nadella to focus on data center expansion, systems architecture, and AI-driven product development.

This was evident at Microsoft's recent Ignite conference where Althoff delivered the keynote instead of Nadella.

Internally, reports suggest that Nadella has launched weekly AI accelerator meetings prioritizing hands-on technical staff over senior executives.

Nadella's call for senior leaders to act like individual contributors
Cultural shift

Nadella has urged senior leaders to act more like individual contributors, spending less time managing and more time building, testing, and learning.

He dismissed the notion that agility is exclusive to start-ups in an internal message.

The same intense work is already happening inside Microsoft without being noticed, he said, adding leaders need to immerse themselves in it rather than admire it from a distance.

Potential leadership changes and new production model
Future prospects

As this cultural reset accelerates, further leadership changes seem likely. Longtime Office and Windows head Rajesh Jha is said to be weighing retirement.

If he were to step down, LinkedIn CEO Ryan Roslansky has been speculated as a potential successor.

The transformation is also redefining Microsoft's approach to software creation with senior product leaders describing a new production model where AI systems act as scalable units of output.