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Artificial intelligence could be the cause of Panos Panay’s departure from Microsoft

In a surprise move, Panos Panay, who had led Microsoft’s Surface and Windows division for over two decades, announced his departure from the company just before Microsoft’s ‘special event’ this year. Reports suggest that Panay was unhappy with recent changes at the Windows and Surface division, which may have led to his rumored move to Amazon. It’s speculated that Panay will head Amazon’s devices department, succeeding the retiring head, David Limp.

One of the factors contributing to Panay’s departure could be the significant investments Microsoft made in artificial intelligence (AI) this year, including its partnership with OpenAI. These investments reportedly resulted in job cuts, with 10,000 employees being let go, and spending cuts across various divisions, including Panay’s devices division. Windows licensing and hardware fell short of Microsoft’s financial projections, leading the company to reduce the resources allocated to Panay’s team.

Despite Panay’s requests for more power and resources for his division, Microsoft did not grant these requests. As a result, Microsoft decided to scale back its device portfolio, affecting products like the Surface headphones, Surface Studio, and Surface Duo, which were put on indefinite hold. Panay’s team had also planned an 11-inch Surface Pro, which was abandoned in favor of the Surface Go 4.

Microsoft is now focusing on its popular offerings, including the Surface Pro, Surface Laptop (Go and Studio models), Surface Hub, and Surface Go. This shift in strategy, with a reduced focus on experimental devices, may have played a role in Panos Panay’s decision to leave the company, as he was known for advocating for experimental hardware ideas. While Microsoft had been working on experimental devices like a foldable phone and tablet, a Surface monitor, and a mini desktop, these projects have taken a back seat for the time being.

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