Microsoft's Pavan Davuluri will lead a team focused on Windows software, devices portfolio and semiconductor chips, the company said on Monday, while announcing the departure of longtime product chief Panos Panay.

The team led by Davuluri will "build silicon, systems and devices that span Windows, client and cloud for an AI world," according to a staff email by Rajesh Jha, executive vice president of experiences and devices group at Microsoft. Reuters has seen a copy of the email.

Microsoft has made big bets on generative AI, integrating the technology into a wide array of its products, including cloud, search and productivity software and services such as its Office suite.

The rejigging of teams comes as Panay steps down after nearly 20 years with the Redmond, Washington-based company, where he helmed the creation of the Surface line of computers and more recently oversaw the launch of the Windows 11 operating system.

Davuluri will report to Microsoft Chief Executive Officer Satya Nadella, the email said.

Microsoft is also creating a team to work on web services and Windows experiences with a focus on AI-based offerings.

The company is hosting a "special event" on Sept. 21, where it is expected to announce updates to its Surface lineup, among other updates.

(Reporting by Yuvraj Malik in Bengaluru and Stephen Nellis in San Francisco; Editing by Anil D'Silva)