Microsoft is creating a new subsidiary, Microsoft Frontier Co., and committing $2.5 billion and 6,000 employees to embed with clients and support AI implementations.
The unit will operate as a forward deployed engineering practice, moving existing Microsoft FDEs, technical consultants, support staff and industry salespeople into client engagements, and will be led by Rodrigo Kede Lima, the company said in an announcement.
Judson Althoff, CEO of Microsoft’s commercial business, said "customers are in very different places right now, and trying to really figure out AI."
The move follows similar efforts across the industry, with cloud rival Amazon announcing a $1 billion FDE initiative two days earlier and AI labs Anthropic and OpenAI setting up FDE groups in May.
Microsoft has also invested tens of billions of dollars in data centres to run generative models and released services such as Microsoft 365 Copilot and GitHub Copilot, which the company says have seen mixed uptake.
Microsoft generated about $2.1 billion in enterprise and partner services revenue in the March quarter, up 2.5% from a year earlier.
