Microsoft to retire Xandr DSP in favour of an AI-powered future

Microsoft Advertising is sunsetting its demand-side platform (DSP), Xandr Invest—also known as Microsoft Invest, formerly AppNexus—as part of a company-wide shift towards AI-powered solutions.

First reported by Digiday, the closure of Xandr is expected to result in multiple layoffs within Microsoft. The DSP will reportedly be replaced by a chatbot-style ad-buying product powered by Microsoft’s generative AI solution, Copilot.

Microsoft acquired Xandr from AT&T in 2021, but as the company’s focus has shifted to AI, its supply-side solutions like Microsoft Monetise have been prioritised.

Although Microsoft’s AI ambitions are well-publicised, this latest move comes as a surprise and mirrors the company’s subtle shut-down of its third-party retail media adtech business, PromoteIQ, last year.

Luca Filardo, SVP of Commercial Growth at Adlook, believes this decision should be seen as a sign of the industry’s future.

He said, “Seeing iconic bidders and platforms like AppNexus (now Microsoft Invest) and MediaMath—both pioneers of the programmatic revolution—disappear from the industry map is a strong and emotional signal for our space. It will be interesting to see how Microsoft’s advertising unit evolves in the coming months.

“Beyond Microsoft’s decision, programmatic advertising is undergoing a new revolution, fuelled by faster and more advanced AI solutions and a more addressable market across devices and formats. We’re already seeing how this plays out across the ecosystem, with new players innovating and driving outcomes across the funnel for advertisers.

“I expect to see more disruption ahead. Our industry remained relatively stable for over a decade, with the same names dominating. Now is the time for challengers to gain actual market share in the name of innovation." 

The original story was first published on Campaign's sister title Performance Marketing World.