Microsoft is rebuilding its security business around AI, and cutting hundreds

Microsoft is the biggest seller of cybersecurity software on the planet. Now it is tearing that business up and rebuilding it around AI.

The overhaul means more AI security tools, fewer traditional products, and merged engineering teams. It has already cost several hundred jobs, The Information reported.

The driver is fear, and money. Companies are worried about AI-powered hacks, and much of their new security spending now goes to Anthropic and OpenAI. Microsoft wants it back.

A new chief, a hard reset

Hayete Gallot leads the changes. She took over Microsoft’s security business in February and reports to Satya Nadella. Before that she spent 15 years at Microsoft, then ran customer experience at Google Cloud.

Her message to staff was blunt. “The entire industry is getting reimagined from the ground up,” she wrote in an internal memo, reported by PYMNTS. “A few months ago, we made those choices. Now we must execute.” She has also pushed out several senior executives.

What it is building

The focus is on tools that fight AI with AI. Gallot is pushing Security Copilot, software that scans code for flaws, and products that let firms watch their own AI agents for trouble.

That last one matters. As companies hand more work to autonomous agents, each one becomes a fresh way in for attackers. Microsoft wants to sell the guardrails.

The push is already visible. On the same day, Microsoft folded its threat-intelligence tools into a single Defender portal and rolled out new expert-led Defender services, it said.

Aimed at the AI labs

The retreat from older products is deliberate. Microsoft is pitching itself as a cheaper, more secure, all-in-one alternative to the AI labs, and it has coached its salespeople to say so.

The pitch lands in a nervy moment. AI now finds software flaws faster than people can, as OpenAI showed with its in-house AI hacker, and Nadella keeps arguing that AI is rewriting the whole business. Microsoft is betting it can sell the cure faster than its rivals sell the disease.