Xbox CEO Asha Sharma has officially canceled the gaming-focused Copilot AI project for Xbox consoles and is winding it down on mobile, while launching a sweeping leadership restructuring.
Copilot AI Project Terminated
In early May 2026, Asha Sharma announced via a post on X (formerly Twitter) that Xbox would begin winding down Copilot on mobile and stop development of Copilot on console, signaling a shift away from in-game AI assist tools. As reported by multiple outlets including Tom’s Hardware and TechSpot, the console version never shipped, and even the mobile iteration is now being phased out.
Tom’s Hardware clarified that the Copilot for Gaming feature—originally revealed at GDC 2025 as a real-time gameplay assistant—was cut entirely for console and is being retired on mobile, with Sharma stating the AI assistant did not align with the company’s future direction. TechSpot noted the decision reflects ongoing challenges at Xbox, including declines in hardware revenue, and that Copilot was considered misaligned with user expectations.
Major Leadership Shakeup
Simultaneously, Sharma has introduced a major leadership overhaul within Xbox, promoting and hiring several executives from Microsoft’s CoreAI division. Forbes and PC Gamer detail that Jared Palmer—formerly VP at CoreAI—has been named a Vice President at Xbox and serves as a technical advisor to Sharma. Tim Allen, a leader in CoreAI Design, now heads design at Xbox.
Tom’s Hardware and GamesRadar+ further report additional leadership additions, including Jonathan McKay (from CoreAI) and David Schloss (from Instacart), as well as promotions such as Jason Ronald, who is overseeing Project Helix under the newly realigned structure.
Implications and Strategic Realignment
This dual move—a retreat from immersive AI tooling like Copilot and a reintroduction of core Xbox leadership through Sharma’s network—appears to underscore a strategic recommitment to console fundamentals and community focus. Industry observers suggest these changes are intended to streamline operations and better respond to player feedback, as noted by Windows Central and GamesRadar+.
Conclusion
Asha Sharma’s early actions as Xbox CEO reflect rapid shifts and recalibration: cutting high-profile AI projects while rebuilding leadership with trusted collaborators. As Xbox continues to address revenue and engagement challenges, the new leadership structure and refocused strategy mark a significant directional change.