Xbox VP Jared Palmer Leaves Microsoft for AI Firm Cognition

Xbox Vice President (VP) of Engineering, Jared Palmer, has left Microsoft to join AI company Cognition. He will lead engineering at the company behind the AI coding agent ‘Devin.’

The decision comes shortly after Palmer joined Xbox CEO, Asha Sharma’s leadership team. It also comes amid a wider reset at Xbox, which has laid off 1.6K employees across its studios and plans to cut another 1.6K roles during fiscal year (FY) 2027, bringing the stated total to 3.2K. Microsoft is also divesting four studios and has proposed closing another as part of the restructuring.

Palmer confirmed his move on X on July 21, 2026, writing, “I’ve joined Cognition to lead engineering,” while thanking Sharma and the Xbox team. He will now work with Cognition co-founder and CEO, Scott Wu.

Neither Palmer nor Microsoft has publicly explained the reason for his departure.

Palmer joined Microsoft’s CoreAI organization in October 2025. He moved to Xbox in May 2026 alongside several of Sharma’s former CoreAI colleagues. He reported directly to Sharma and worked across developer tools, product, engineering, and infrastructure.

Jared Palmer Leaves Amid Asha Sharma’s Xbox Reset

Sharma previously highlighted Palmer’s experience in building developer tools that reduce friction and improve productivity. She stated that was “exactly the mindset we want,” with his role focused on using technology to support creators and address complex product and engineering challenges.

The restructuring comes as Microsoft works on its next-generation Xbox hardware, known as Project Helix. Platform development often intensifies in the period before a new console launch. However, there is no indication that Palmer’s departure will affect the project.

Palmer now returns to the AI and developer tools sector. Cognition received $21M USD in backing led by Founders Fund in 2024 and has reportedly reached a valuation above $4B. Before joining Microsoft, Palmer worked at Vercel, where he created v0 and the AI SDK.

Palmer’s step also reflects the growing competition for engineering talent between established gaming companies and AI firms as investment in agentic software development accelerates.