Microsoft's Agent Factory: The Future of AI Software with EVP of Core AI Jay Parikh

In this live episode of Founded & Funded, Madrona Managing Director Soma Somasegar sits down with Jay Parikh, EVP of Core AI at Microsoft, to unpack the company's evolution from a software factory to an agent factory Jay leads the team responsible for Microsoft's core AI stack, the systems that power Copilot, the tools developers rely on, like GitHub, and the infrastructure that makes large-scale AI possible. In short, his group builds the underlying tech that Microsoft and thousands of companies use to create AI-powered applications and agents. In this conversation, Soma and Jay dive into what Jay calls the Agent Factory, which is a new paradigm reshaping how software gets built in the reasoning era. They explore how AI changes the development lifecycle, why observability and evals are becoming mission-critical for enterprises, what it means to collapse traditional engineering functions, and how organizations should prepare for a world where models, agents, and human builders all collaborate in real time. This is a must-watch for founders, developers, and enterprise leaders who want to understand what's coming — and how to prepare for a world of real-time collaboration between humans, models, and agents. Full Transcript: http://www.madrona.com/microsofts-agent-factory-the-future-of-ai-software-with-evp-of-core-ai-jay-parikh Chapters: (00:00) Introduction (2:43) Jay's Background & Microsoft Role (4:33) The Reasoning Revolution (6:45) From Software Factory to Agent Factory (8:38) Building the Agent Factory (10:54) Impact on Microsoft's Future (12:49) AI Code Generation & Productivity (14:46) Shifting Engineering Focus with AI (16:22) Future of Software Development (18:17) Real-World AI Productivity Gains (20:18) Microsoft's AI Infrastructure Investments (24:01) Challenges with AI Evaluation & Observability (26:12) Model Choices & Microsoft's Strategy (28:40) Audience Q&A