Charles Lamanna has put Microsoft's once-frustrating AI assistant back on track, and one of his key moves was persuading the company to abandon its "single-model binding strategy."

In the summer of 2025, Microsoft (MSFT) was fielding a steady stream of customer complaints: the Copilot AI assistant was glitch-prone, and its ability to automate work in Excel and PowerPoint fell short of expectations. Charles Lamanna, then a Microsoft president and a rising internal star, pitched a bold idea to CEO Satya Nadella: the company should consider procuring AI models from Anthropic to improve Copilot's performance. "At the time, that idea was considered heresy," Lamanna said in an interview. According to another Microsoft employee familiar with the matter, the proposal drew skepticism from other executives, including Judson Althoff, who heads Microsoft's commercial business. Althoff pointed out that Anthropic's models cost far more than OpenAI's, and thanks to Microsoft's deep partnership with OpenAI, Microsoft could use the latter's models at no additional charge. But Lamanna won Nadella over with product demonstrations showing that Anthropic's models performed better at tasks such as the math required by Excel and generating polished PowerPoint decks. "We kept pushing, because if you believe in an idea, you have to go all in," said the 38-year-old Lamanna.

Months later, Nadella placed thousands of developers working on Copilot under Lamanna's management, streamlining what had been scattered, independent engineering teams. More than a year on, Lamanna's bet on rebuilding Copilot's underlying architecture appears to be paying off. Customers including AT&T say they have clearly seen Copilot improve over the past year. AI is reshaping the industry landscape, and Microsoft is still fighting to win enterprise customers; since the start of this year, Copilot's enterprise user base has doubled and now exceeds 30 million. Meanwhile, Lamanna's influence inside Microsoft keeps growing. In March, Nadella appointed him an executive vice president overseeing the Copilot engineering team, reporting directly to Nadella (Lamanna shares responsibility for Copilot with fellow executive vice president Jacob Andreou). Earlier this month, Nadella also handed him the Office business, making him fully responsible for Microsoft's flagship productivity software. Rajesh Jha, the executive vice president who previously oversaw Office, Windows and other businesses, retired in July. Lamanna also manages the Teams business, and his teams now total roughly 25,000 people, more than triple the size he managed a year ago. (Microsoft has more than 220,000 employees overall; sales and Azure cloud are its two largest divisions, each with more than 60,000 full-time staff.) Several veteran Microsoft executives say they now see Lamanna as a potential candidate to succeed Nadella as the next CEO. Like Nadella, Lamanna is a studious manager willing to dig deep into technical engineering details. Insiders say he is not a charismatic salesperson, but Nadella has been impressed by his ability to integrate an ever-expanding set of teams, and the two meet weekly. Over the past year, Nadella has brought Lamanna to Microsoft's quarterly board meetings, along with executives including Andreou, Xbox chief Asha Sharma, security head Hayete Gallot, and Arun Ulag, the executive vice president responsible for Azure database products. Some Microsoft leaders believe Nadella is deliberately introducing multiple CEO succession candidates to the board.

Lamanna is under enormous pressure. Enterprise customers are scrutinizing every dollar of their AI budgets, and he needs to build products that persuade them to keep increasing spending on Microsoft's AI and productivity software. A year after Copilot began connecting to Anthropic's models, Lamanna's focus is on continuously refining Copilot so the system can automatically select the best combination of models for a given task while controlling costs without sacrificing quality. With rivals proliferating in the market (including products from Anthropic and OpenAI), this is crucial for Microsoft to keep its pricing competitive on products such as Office. Lamanna operates in a complicated situation: Anthropic and OpenAI are both core Microsoft commercial partners and fierce competitors of each other. Lamanna tells employees that Microsoft should be the "Costco of AI" — a place where everyone from cash-strapped students to millionaires comes to buy AI products, getting the highest value at the best price. "We won't be a niche boutique tool that only the world's top programmers and developers can use at a high price," Lamanna said. "We need to keep pushing prices down so everyone can afford to use AI." Jacob Andreou spoke last week at a Windows event.

From intern to company leader, Lamanna has spent almost his entire career within the Microsoft system. About 20 years ago, while an undergraduate at Notre Dame, he landed a software engineering internship at Microsoft and worked on OneCare — a now-discontinued Windows antivirus product — his first job at the company. After graduating in 2009, he stayed on as a software engineer in what was then Microsoft's fledgling cloud business; he left in 2012 to co-found MetricsHub, an enterprise software startup. A year later Microsoft acquired the company, bringing Lamanna back. Over the next decade, he rose steadily through the cloud division led by Scott Guthrie, eventually taking charge of Microsoft's business applications unit, which included the Dynamics 365 customer relationship management software and the low-code development tool Power Apps. Lamanna says that while leading those teams, he tried to break Microsoft's notorious culture of vicious internal competition by imposing a "no jerks" policy in his division. A decade ago Microsoft operated a brutal employee ranking system in which employees competed against each other and departments were rife with infighting, making that reform very necessary at the time. He also worked to cut management bureaucracy: dealing directly with engineering teams, writing code himself, and quickly turning good ideas from frontline employees into products that could reach customers.

After several years running the business applications unit, Lamanna moved roles in June of last year to report directly to Jha. At the time he was still nominally in charge of the business applications business, but beginning last summer he gradually took on more Copilot-related work within Jha's organization. At that point, separate Windows and Office teams were each developing their own Copilot features, scattered across many Microsoft applications. Jha's incentive approach was this: Copilot features with high customer adoption would be rolled out across all versions of Copilot. Employees said the system was chaotic; many executives complained that the model sparked team infighting, with departments fighting over credit for other engineers' work. Lamanna then proposed to Nadella that Anthropic's models be brought in, a change that would affect Copilot across all applications. Lamanna said the transition was critical: Copilot had previously been designed by default to rely on a single model vendor, OpenAI, and could not smoothly accommodate multiple models. "Developing Copilot on a single-model binding long term is dangerous. It deeply ties the product to that model's behavioral traits, and adding other models in the future would be extremely difficult," Lamanna said. In March, Jha announced his departure plans. Nadella consolidated all the scattered engineering teams, placing them under Lamanna's unified responsibility for Copilot's underlying system. Current and former employees said the new structure brought relief to many engineers; under Lamanna's management, teams moved forward together toward a unified goal. Subordinates also praised his quick decision-making and his willingness to adopt good ideas from reports regardless of seniority. "If we stick with the old model, we'll fall behind. Lamanna won't wait for formal reviews and lengthy processes to finish before acting. He encourages us to try new approaches with manageable risk, and the approach has worked," said Sufian Loukili, a vice president of engineering on Lamanna's team.

Make every dollar customers spend worthwhile. Lamanna's core task right now: every quarter, persuading enterprise customers to buy more Microsoft AI software while continuing to lower Copilot's operating costs. Since Microsoft brought in Anthropic's models last fall, a group of engineers in the Office division developed agent mode. The feature orchestrates both OpenAI and Anthropic AI models, performing longer reasoning for Office automation tasks, and it entered preview last fall. Early customers had to turn on agent mode manually. Lamanna found that in almost every task scenario, turning on the mode produced better results. This spring, he completed a Copilot revamp that made agent mode a default feature. People familiar with the matter said Microsoft's internal customer satisfaction data improved significantly after the revamp. Customer feedback said Copilot's quality had clearly improved. Mark Austin, a vice president at AT&T, said that since Microsoft launched agent mode, the vast majority of AT&T employees' individual office automation work has been handled by Copilot. Over the past year AT&T has added Copilot licenses and now has about 18,000. Still, the improvement is not enough to win over every customer. Nimesh Mehta, chief information officer of National Life Group, said employees tested Copilot in 2023, when the product was essentially "unusable," and tested it again this spring, finding the quality had improved dramatically. Even so, most of the company's employees still use ChatGPT, and Mehta has not yet decided to switch back to Copilot. "The interface still isn't perfect, but the overall experience is much better. Still, the bad experience in the past left users with a very poor impression, and people are reluctant to try it again," Mehta said. People familiar with the matter said Lamanna's top near-term goal is to improve Copilot's gross margin while maintaining customer satisfaction. Over the past six months, OpenAI's model capabilities have caught up with Anthropic's, and Lamanna directed his team to adjust Copilot's orchestration logic: agent mode now prioritizes calling OpenAI models. Microsoft can use OpenAI models at no extra charge, and the move improves product margins. In recent months Lamanna has pushed his team to improve Copilot's efficiency in other ways. Team engineers built their own model-routing system that, relying on in-house large models, automatically selects the lowest-cost model to complete tasks while ensuring quality. The vast majority of Office Copilot users use automatic mode, with the routing program selecting models automatically, which also helps improve gross margin. People familiar with the matter said Microsoft's payments to Anthropic to support Copilot are still rising this year; but by switching agent mode and other advanced features to OpenAI models, it has eased the pressure of rising costs even as the user base grows. Lamanna also led development of features such as Copilot Cowork in Office, targeting Anthropic's Claude Cowork; such AI tools can handle complex tasks on a computer, such as managing files. Another result is the AutoPilot agent, inspired by the viral OpenClaw project. Microsoft hopes that with AutoPilot, it can turn Copilot into a more powerful "always-on background" agent that can also call tools from third-party vendors such as Workday, making Microsoft software the default operating platform for the vast majority of users' work. Omar Shahine, a Microsoft vice president who heads the AutoPilot development team, said he and Lamanna discuss all kinds of new experimental tools every day, such as Meta's Muse and Instinct's AI agents. Using external tools is unusual at Microsoft, which has historically encouraged employees to use only its own products. Shahine sees this as an inevitable trend: "The industry is undergoing a huge transformation, and this is crucial."

Lamanna's current test: keep driving Copilot's growth while persuading enterprise customers to keep buying Microsoft's bundled packages of Office, Windows and security software. Last week Microsoft launched a new Copilot super app, a key step in that strategic vision. The new version integrates 365 Copilot, AutoPilot, Copilot Cowork and other features; customers pay extra based on how much they use the features. If Lamanna achieves this goal, it will be a major career accomplishment; should Nadella choose to step down as CEO, that track record would greatly strengthen Lamanna's competitiveness as a successor. More than a decade after founding a startup, Lamanna has never again served as a CEO, but he has not ruled out the possibility of running a company again. Asked whether he wants to be a CEO again, he replied: "In the abstract, yes. But right now, I'm really enjoying making Copilot a top-tier product that is both high-quality and affordable for all customers."