Microsoft is losing a key AI exec during a crucial moment that could shape the future of the company (MSFT)

harry shum microsoft research

Harry Shum, the Microsoft executive charged with overseeing the artificial intelligence strategy for the entire company, is leaving after 23 years.
Microsoft Chief Technology Officer Kevin Scott has already taken over his group and responsibilities.
Microsoft CEO Satya Nadella recently said artificial intelligence would play a key role in the company's future and central to the company's strategy to gain more customers for its important cloud business.
Nadella said Microsoft is just now starting the "first innings" of artificial intelligence technology.
Shum was key to Microsoft's efforts to take the research it was doing through research subsidiary Microsoft Research and translate it to actual products Microsoft can sell. Now Microsoft has to do that without him just as the business is starting to come together.
Shum hasn't revealed his next move, but a Microsoft spokesperson said he will continue to advise Nadella and Microsoft cofounder Bill Gates after he departs.
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Microsoft is losing a key executive who helped the Redmond-based company turn artificial intelligence research into products just as its AI business is getting off the ground.

Harry Shum, who runs Microsoft's AI and Research group, is leaving in February after 23 years at Microsoft. He has already shifted his group and responsibilities to Microsoft Chief Technology Officer Kevin Scott, which include overseeing the company's AI strategy, research and development on infrastructure, services, and apps, and AI-focused product groups including Bing.

The news was first reported by ZDNet's Mary Jo Foley, and confirmed by Microsoft to Business Insider.

Shum's departure comes at a time when Microsoft is making big investments in AI. It's one of the technologies Microsoft CEO Satya Nadella recently said would play a key role in the company's future and central to the company's strategy to gain more customers for its important cloud business. Nadella said Microsoft is starting the "first innings" of artificial intelligence technology.

Shum was key to Microsoft's efforts to take the cutting-edge work it was doing through its more academically-minded subsidiary Microsoft Research and translate it into actual products Microsoft can sell. The AI and Research group he leads was explicitly created for that purpose — and now Microsoft will have to embark on this goal without him.

Shum hasn't revealed his next move, but a Microsoft spokesperson said he will continue to advise Nadella and Microsoft cofounder Bill Gates after he departs.

"Harry has had a profound impact on Microsoft," Nadella said in a prepared statement. "His contributions in the fields of computer science and AI leave a legacy and a strong foundation for future innovation."

Shum's legacy

Shum joined Microsoft Research in 1996 as a researcher at the company's Redmond headquarters. He moved to Beijing in 1998 to help start what is now Microsoft Research Asia and worked his way up to managing director and distinguished engineer. He later led product development on the Bing search engine from 2007 to 2013.

Microsoft formed the AI and Research group in September 2016 by combining several teams, including Bing, the Cortana virtual assistant, and its robotics efforts. The idea was to place a greater emphasis on turning AI research into AI products, with Shum at the helm.

Microsoft doubled down once again on that effort last year when it created new groups dedicated to AI products, taking guidance from Shum, such as the AI Cognitive Services and Platform focused on AI for Microsoft's Azure cloud business and the AI Perception and Mixed Reality group, which helps tie Azure together with cutting-edge computer vision and augmented reality technology like Microsoft's own HoloLens 2 goggles.

One result was the Azure AI platform, helping developers use Microsoft's artificial intelligence tech in their own cloud computing apps. The platform now has 20,000 customers, and more than 85% of Fortune 100 companies have used Azure AI in the past 12 months, according to the company.

Microsoft's new AI leader

Scott has been Microsoft's chief technology officer since 2017, when he came over from LinkedIn, where he had been the senior vice president of engineering and operations.

In his capacity as CTO, Scott largely worked as a futurist, helping the company navigate industry trends and identify new opportunities.

Research and development was previously outside his purview, but Scott worked on the company's artificial intelligence efforts through recruiting engineering leadership and holding events like AI 365, a forum to discuss artificial intelligence.

Last year, Scott shared his predictions for the major technology trends to come in an interview with Business Insider, including that the cheap, powerful silicon processors coming in the next five to eight years will lead to every device getting a microprocessor capable of running advanced artificial intelligence.

AI is the "perhaps the second-most important thing" Microsoft is doing, Scott said — behind its flagship businesses like Windows, Office, and Azure.

What's at stake

Artificial intelligence has been a major emphasis for Microsoft in the past few years. Nadella even changed the company's vision statement in 2017 to include AI: "We believe a new technology paradigm is emerging that manifests itself through an intelligent cloud and an intelligent edge where computing is more distributed, AI drives insights and acts on the user's behalf, and user experiences span devices with a user's available data and information."

The company's approach is to find ways to simplify AI so that any company can use it, and it recently released new features for its Azure AI platform towards this end. Experts say the company that figures out how to sell practical applications for AI could have an advantage in the fierce competition for cloud computing customers.

Meanwhile, Microsoft is the No. 2 cloud provider behind Amazon Web Services, but it's made some significant gains, including recently winning a $10 billion Pentagon cloud computing contract over AWS.

Azure remains crucial important to Microsoft's business, and its future growth. Microsoft's overall commercial cloud business, in which it also counts Microsoft Azure, Office 365 and other cloud services, reached $11.6 billion in sales in the company's most recent quarter, up 36 percent year over year.

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