Microsoft Advertising to shut down Xandr DSP, shifts focus to AI-driven ad solutions

New Delhi: Microsoft Advertising is closing its Xandr Demand-Side Platform (DSP), previously known as Microsoft Invest and Curate, by February 2026. 

The decision reflects a strategic pivot away from traditional programmatic advertising toward AI-powered advertising solutions, according to multiple industry sources.

Microsoft Advertising Corporate Vice-President Kya Sainsbury-Carter wrote in a blog post that the company is "exclusively focusing our buy-side advertising technology investments on the Microsoft Advertising Platform" starting in 2026. This strategic shift comes as Microsoft strengthens its commitment to AI-powered advertising solutions designed for what they describe as a "conversational, personalised, and agentic" future.

The Xandr DSP, acquired by Microsoft from AT&T in 2021 for approximately $1 billion, has been a key component of the company’s ad tech portfolio, enabling advertisers to buy ad space across websites and apps through automated, data-driven auctions. 

However, Microsoft informed clients that the DSP no longer aligns with its vision for personalised, AI-driven advertising, which prioritises integration with its first-party assets like Bing, Xbox, LinkedIn, and Windows.

The closure will involve layoffs, according to reports. While exact numbers remain undisclosed, the impact is expected to be significant within Microsoft’s ad tech division. The company emphasised its commitment to supporting clients during the transition, with the DSP set to be replaced by a new chatbot-style ad-buying product powered by Microsoft’s generative AI solution, Copilot, by March 2026.

The closure marks the end of a chapter for Xandr, which began as AppNexus before its acquisition by AT&T in 2018 and subsequent rebranding. Microsoft’s exit from the DSP market underscores a broader trend of consolidation in ad tech, as companies streamline operations to focus on proprietary, AI-enhanced platforms. Advertisers using the Xandr DSP have until February 2026 to transition to alternative solutions, with Microsoft pledging support throughout the process.