CEO Satya Nadella's decision to name Microsoft's first-ever chief scientific officer shows how AI is key to his master plan to finding the next big market

ReutersMicrosoft CEO Satya Nadella.

• Microsoft quietly appointed its first chief scientific officer last week.
• It's the latest addition to Microsoft's C-suite, which analysts say includes other uncommon roles like executive vice president of gaming.
• These roles underline Nadella's priorities, analysts say, which at the end of the day are artificial intelligence and the cloud.
• Nadella's lieutenants are especially important now as Microsoft cofounder Bill Gates steps down from Microsoft's board (although he said he still plans to advise Nadella).
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Microsoft recently appointed its first-ever chief scientific officer - the latest title to join CEO Satya Nadella's C-suite.

The company promoted Eric Horvitz - a longtime technical fellow and Microsoft Research director - to the role, where he'll be charged with advising company leaders on scientific matters including "critical areas" such as artificial intelligence.

While Microsoft has added more common top executive roles during Nadella's tenure - Panos Panay, for example, was promoted to chief product officer in 2018 - the unique roles added to Microsoft's executive teams underline Nadella's priorities to promote its artificial intelligence and cloud businesses. Nadella in 2017, for example, added Xbox chief Phil Spencer to executive vice president, reporting directly to the CEO.

"I believe that Satya is a once-in-a-generation CEO with tremendous vision and a willingness to take risks many public CEOs won't take," Futurum Research analyst Daniel Newman said. "Adding leadership roles in very specific niches like gaming isn't crazy by any means, but it shows an acute attention to detail and a desire to make sure every part of the business gets the attention it requires to maximize both product and service quality, but also investor returns."

Nadella's lieutanants are especially important now as Microsoft cofounder Bill Gates, an important adviser, steps down from Microsoft's board (although he said he still plans to advise Nadella).

It's all about AI and the cloud

Microsoft created the chief scientific officer role the wake of longtime AI chief Harry Shum's retirement.

Shum retired in February comes at a critical time for Microsoft's AI research and business - which Microsoft CEO Satya Nadella has said will play a key role in the company's future - and it appears Horvitz will be responsible for providing some of the companywide guidance on artificial intelligence that Shum would have.

While chief scientific officer and executive vice president of gaming might be uncommon additions to C-suite, 451 Research analyst Jean Atelsek they're really about artificial intelligence and the cloud.

"I came of age when the C-suite consisted of CEO, CFO and COO. Now we have chiefs for information, technology, data, security, marketing, gaming, science, etc.," Atelsek said. "In my opinion, this reflects the massive reach of giant technology companies into our lives and the size of the sub-organizations needed to steer the corporate ship in a coordinated fashion."

Gaming has "pushed the limits" of cloud technology in terms of speed by processing images and data to and from gamers' locations, Atelsek said, and artificial intelligence by enabling near-realtime language translation of streaming voice audio.

"The games unit has shifted focus from devices (consoles) to developers and the community that brings more users (and revenue) to its platform," Atelsek said.

The appointment of a chief scientific officer is important in the rise of artificial intelligence and quantum computing, Newman - the Futurum Research analyst said - but also in health care, as evidence by the COVID-19 outbreak.

"The growing concern around COVID-19 is a great example of where companies with boundless resources may be able to step up to deliver helpful contributions that could slow the spread of a pandemic like this using AI, analytics, quantum and more," Newman said. "As our world continues to shift and technology brings us closer together, big tech will need roles like the chief scientific officer to bridge technology and its role in society more succinctly."

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