Embodied AI — basically, AI that is integrated into the physical world — is one important category on Young’s radar. Self-driving vehicles, for example, will be big for Microsoft, he explained — but not necessarily vehicles that transport people. It will be “a lot more about transportation of goods and services around,” he said, like long-haul trucking: “Just think about all the vehicles that operate in small warehouse contexts or even a shipyard.” 

Young also highlighted the potential of humanoid robotics, citing Microsoft’s investment in companies like Figure (which is also a partner with Microsoft, in a collaboration that gives Figure access to Microsoft’s AI infrastructure and services). “It’ll be quite commonplace, particularly in categories of work where it’s very dangerous for people,” he said, citing work on offshore oil rigs, or oil drilling in Antarctica. “There are going to be a lot of different opportunities to bring new types of embodied technology into those kinds of categories,” Young said.

Sustainability is another area that Young predicted will be a big trend for Microsoft in 2025, particularly when it comes to delivering more efficiency for the data centers the company is building — including the cooling necessary to make sure infrastructure does not overheat, as well as making data centers more water-efficient. “We have a series of different methods we’re employing in our data centers, some of them we’ve been doing for a while, others are new,” he said. “We continue to work with our partners, like Nvidia, AMD, even the in-house silicon we’re building at Microsoft.” 

As far as venture investments, there are a couple of key categories that Young thinks are important examples of where Microsoft is looking for AI growth. AI infrastructure is one where Microsoft “is making a lot of bets,” he said, including cybersecurity. Microsoft has invested in a company called Hidden Layer, which focuses on protecting AI models against being manipulated by third-party actors. Another is the need for data governance and compliance: “As we bring more AI capabilities into organizations, those AI agents, the copilots, are going to want to access information. You need better governance, you need identity capabilities.” Microsoft has invested in a number of companies in this space, he explained, including Reliance AI. 

Lastly, Young cited the healthcare space as an exciting one for investment in AI – noting that Microsoft is investing in companies that use generative AI to look for natural remedies for certain ailments, like eczema, as well as using AI to assist pathologists and radiologists in cancer screening.

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