Microsoft says it has formed a new 5,000-person engineering and research team to focus on its artificial intelligence products — a major reshaping of the company’s internal structure reminiscent of its massive pivot to pursue the opportunity of the Internet in the mid-1990s.

“We are on the cusp of a paradigm shift in computing that is unlike anything we have seen in decades,” said Microsoft CEO Satya Nadella in an internal email to employees this morning, the text of which was obtained by GeekWire.

The company also confirmed internally this morning that eight-year Microsoft veteran Qi Lu, the top executive in charge of Office, Bing and related products, will be leaving the company “to focus all his time on recovering from health conditions caused by a prior injury,” according to Nadella’s email. Recode reports that Lu was in a bicycle accident several months ago.

The new Microsoft AI and Research Group, to be led by Microsoft Research chief Harry Shum, establishes a fourth engineering division inside the company, along with the Office, Windows and cloud groups.

The new group will absorb some of the key product engineering teams from the previous Applications and Services Group that was led by Lu, including Cortana and Bing. In addition, Microsoft says the new group will include Microsoft Research, the Information Platform Group, and the Ambient Computing and Robotics teams.

“End-to-end innovation in AI will not come from isolated research labs alone, but from the combination of at-scale production workloads together with deep technology advancements in algorithms, systems and experiences,” Shum says in a blog post. “The new group will provide greater opportunity to accelerate our innovation in AI, and to enable Microsoft to create truly intelligent systems and products for our customers.”

The remaining portions of the Applications and Services Group will be renamed the Office Product Group, led by Microsoft executive Rajesh Jha, who will join the company’s senior leadership team. As part of the changes, Nadella says in his email that top Skype executive Gurdeep Singh Pall will be shifting to a new role, with Jha now leading Skype, as well. Microsoft didn’t provide further details on Pall’s next role.

Microsoft is competing against Amazon, Google, Facebook, Salesforce and many other rivals in an effort to lead the burgeoning field of artificial intelligence. Earlier this week, at the Microsoft Ignite business technology conference, Nadella said the company “is pursuing AI so that we can empower every person and every institution that people build with tools of AI, so that they can go on to solve the most pressing problems of our society and our economy.”

Here is the full text of Nadella’s memo to employees about the changes.