Phil Spencer will retire after 38 years at Microsoft; Asha Sharma, the president of product in Microsoft's Core AI business, will become the CEO of gaming (Jordan Novet/CNBC)

Phil Spencer, who led Microsoft's gaming division for nearly four decades, is retiring as the company faces growing challenges in its Xbox business. Asha Sharma, currently president of product at Microsoft's Core AI business, will take over as CEO of gaming, marking a shift towards integrating artificial intelligence into gaming strategies.

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