• by Laurie Sullivan  @lauriesullivan, May 14, 2025

Microsoft put plans in place to shutter its demand-side platform, with the advertising division informing clients the ad-tech unit no longer aligns with its AI priorities.

Invest -- formerly Xandr DSP and before that, AppNexus -- will shut down by March 2026, the company explained in a blog post. Microsoft Monetize, the supply-side platform (SSP) and publisher of ad technology, remain intact.

"We are entering a new era — one defined by conversational AI experiences, agentic systems that simplify decision making and bring brands closer to people, and predictive design models that fundamentally reshape what people expect from digital services," Microsoft wrote. "This new era will be enabled by purpose-built AI-powered advertising platforms that make personalized advertising simple."

Microsoft hinted at this with several announcements in March. The goal was to help businesses enter a new era, "where websites can talk and ads become highly personalized and naturally integrated into conversational experiences."

Product strategies must now be built to quickly innovate with adaptive tools designed for the AI internet. The company is expected to replace the DSP with a chatbot-style ad-buying product powered by Copilot, Microsoft’s generative AI (GAI) platform. 

Mark McEachran, vice president of product, DSP at Basis Technologies, doesn't believe a chatbot will be "sufficient to replace the value of Xandr's DSP. And if this turns out to be the case, they could still look to acquire the next attractive piece of ad-tech to replace it."

Perhaps that's why Captify Chief Product Officer Amelia Waddington believes Microsoft could try to acquire Google's ad server, Google Ad Manager, if Google is forced to sell as part of the remedies in the monopoly case laid out by the U.S. Department of Justice. 

A more plausible scenario is Microsoft's collaboration with Criteo on retail media and position in programmatic. Building to consolidate this position on the supply side when Google exit makes sense. Shedding the DSP as a potential blocker might open a much bigger opportunity to lead on supply side tech outside of social, she said.

Microsoft's move toward agentic requires a more private and personalized advertising experience, Microsoft said. The company is committed to support clients during this transition and ensuring they have the guidance needed to minimize disruption and continue to achieve their business goals through advertising.

Microsoft will continue to support access to its inventory and the inventory of its partners through third-party DSPs that share the same focus on privacy, quality, and transparency.  

“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," Luca Filardo, SVP commercial growth at Adlook, wrote in an email to MediaPost. 

Filardo said programmatic advertising is undergoing a dramatic shift, fueled by faster and more advanced AI solutions and an addressable market across devices and formats. He expects to see more disruption. While the industry has been stable for more than a decade, with the same names dominating, challengers will now gain real market share.