Google cuts 35% managers, Microsoft AI models

The tech industry witnessed sweeping workforce changes and strategic AI pivots this week as Google eliminated 35% of its managers, Microsoft launched its first in-house AI models, and Meta suffered a talent exodus with key researchers returning to OpenAI. Meanwhile, xAI entered the competitive coding assistant market and Apple pushed back against UK regulations that mirror the EU’s Digital Markets Act.

Google Eliminates 35% of Managers in Major Restructuring

Google confirmed it has cut 35 percent of managers overseeing small teams compared to last year, aiming to have fewer leaders spread across much larger groups of employees. Many managers whose positions were eliminated remain at the company, having been moved into different roles where they now work as individual contributors instead of supervising staff. The move is part of a wider efficiency plan that includes voluntary exit programs offered across ten units, which between 3 and 5 percent of employees have accepted this year.

Microsoft Launches First In-House AI Models

Microsoft launched MAI-1-preview, a text-based model trained on approximately 15,000 Nvidia H100 GPUs, focused on instruction-following and everyday queries. Alongside it, Microsoft unveiled MAI-Voice-1, a speech model that generates a 60-second audio clip in just one second on a single GPU, already powering Copilot Daily, Podcasts, and upcoming storytelling demos. The move signals Microsoft’s push to build consumer-focused models in-house under Mustafa Suleyman, even as its OpenAI partnership faces strain amid anticompetitive concerns.

xAI Enters Competitive Coding Assistant Market

xAI launched grok-code-fast-1, a compact and cost-efficient agentic coding model designed to handle common coding tasks quickly, available free for a limited time with partners like GitHub Copilot and Windsurf. The release signals Musk’s entry into the competitive AI coding space, joining OpenAI’s Codex and Microsoft’s GitHub Copilot. The launch comes the same week xAI sued Apple and OpenAI, accusing them of conspiring to block competition in the AI market.

Meta Loses Key AI Researchers to OpenAI

Two prominent AI researchers, Avi Verma and Ethan Knight, left Meta’s new Superintelligence Labs to return to OpenAI after working at the company for less than one month. Chaya Nayak, who led generative AI efforts, is also heading to OpenAI, while researcher Rishabh Agarwal separately announced his departure from the same superintelligence team. These quick exits are a major setback for the new lab, which was created to outpace rivals and reports directly to Mark Zuckerberg while aggressively recruiting top AI talent.

Trump Administration’s Intel Deal Blocks Foundry Spin-off

The U.S. government’s 10% equity stake in Intel includes a five-year warrant that penalizes the company if it spins off or sells its loss-making foundry unit, effectively forcing Intel to retain it. Intel received $5.7 billion in cash from previously awarded CHIPS Act grants as part of the deal. The foundry unit lost $3.1 billion in Q2, and despite analyst pressure to spin it off, the deal structure shows the administration’s priority to keep U.S. chip manufacturing onshore.

Apple Warns UK Against New Tech Regulations

Apple warns the UK that its proposed regulations mirror the EU’s Digital Markets Act, a policy it says delays features and is ultimately bad for both users and app makers. The company claims that demands for “interoperability” compel access to sensitive user data and intellectual property, undermining privacy and security protections. The CMA counters that its UK-specific plan differs from the EU’s and will let developers “steer” payments to other systems without introducing new risks for consumers.

This week’s developments highlight the tech industry’s ongoing transformation, with major players restructuring operations, building in-house AI capabilities, and navigating complex regulatory landscapes while competing fiercely for top AI talent.