Microsoft Xandr DSP Shutdown is Alarming Sign for Third-Party Ad Tech

Microsoft Xandr DSP shutdown announcement has come down as the end of third-party ad tech. Sooner or later, the looming death of third-party data and supported ad tech is going to have a substantial impact on advertising. 

The news is crucial for the ad tech industry, as it signals the beginning of the end. Microsoft believes that the future of digital engagement is two-way and communicative rather than just feeding content and monologues. 

The shutdown announcement indicates that the Xandr Demand-Side Platform (DSP) is no longer a feasible model for future advertising. 

Let’s dive deep into the nuances of this sudden development from Microsoft and the larger meaning behind the Microsoft Xandr DSP shutdown. 

Microsoft Xandr DSP shutdown announcement through a blog post 

Yes, they made the announcement in a literal blog post. Making such an announcement in such a nonchalant way shows that Microsoft really does not love Xandr DSP (Microsoft Invest). 

On May 14, Kya Sainsbury-Carter, Corporate VP of Microsoft Advertising, wrote in a blog post: 

“Our commitment to more private and personalized advertising experiences for a more agentic and conversational world is not achievable with the industry’s current DSP model, which no longer aligns with our investment in this future.” 

After that, she announced the plug-out day for Xandr DSP: 

“We will no longer support media buying through our DSP, Microsoft Invest, starting on February 28, 2026.” 

Microsoft is entering a new era of advertising by leveraging the capabilities of AI and transforming digital engagement to be more conversational, personalized, and agentic. 

Additionally, Microsoft has been investing heavily in AI and cloud infrastructure, with plans to invest $80 billion in AI-enabled data centers in fiscal 2025. This significant investment underscores Microsoft’s commitment to advancing its AI and advertising capabilities, even as it winds down platforms like Microsoft Invest. 

Kya wrote: 

The keyword is ‘private’ behind the shutdown decision 

Why is every tech giant suddenly obsessed with first-party data, signal-based targeting, and intent-driven advertising strategies? One word: privacy. 

Microsoft isn’t alone here. Meta, Apple, and Google are all marching to the same beat. The era of third-party cookies, mass tracking, and data hoarding is crumbling under the weight of privacy demands. 

Microsoft made it clear: the traditional DSP model no longer fits the future of advertising. That future is private, personalized, and conversational, powered by AI, large language models, chatbots, assistants, and intelligent recommendations. 

But Xandr DSP was built on the old rules: third-party tracking, real-time bidding, and audience targeting at scale. In a privacy-first world, that model feels like a relic. 

And if you’ve been watching the endless antitrust cases and debates over data monopolization disguised as “business,” Microsoft Advertising’s pivot shouldn’t be a surprise. It’s a strategic move to future-proof their operations and make their advertising ecosystem more user-first. 

New AI and data protection laws are on the horizon, and they won’t allow outdated systems. So, Microsoft is pulling the plug now because now is better than later. 

It’s all part of a broader shift: aligning advertising with evolving global privacy laws (like GDPR), AI regulations, and the fast-approaching cookieless future. 

Netflix’s in-house ad tech challenged Microsoft Xandr DSP

Microsoft Xandr DSP had a close and exclusive partnership with Netflix beginning in 2022.  

At the time, Netflix had chosen Microsoft to power its ad tech infrastructure to launch its ad-supported tier. However, last year, it took a dramatic turn when Netflix unveiled its ambitious plans to build in-house ad tech. 

Now, that relationship is over. Netflix has officially cut ties with Microsoft Xandr DSP. 

The new Netflix Ads Suite, its proprietary advertising platform, is already live in the US and Canada. It’s set to launch in EMEA next week and will roll out across all 12 ad-supported countries by June. 

Speaking at the Netflix Upfront, Amy Reinhard, President of Advertising at Netflix, proudly stated, “By controlling our ad tech, we’ll be able to deliver newer tools, better measurement, and more creative formats.” 

At the core of Netflix, Ads Suite integrates first-party data and AI to create more personalized and immersive ad experiences for its ad-supported tier. The platform now boasts stronger data capabilities, support for programmatic buying, first-party measurement tools, and even generative AI that can instantly tailor advertiser creatives for maximum impact. 

Netflix’s move to build and scale its advertising stack challenges traditional DSP models like Xandr. It signals a shift in how premium content platforms plan to control and monetize their ecosystems. 

New offerings for publishers after Microsoft Xandr DSP shutdown

While Microsoft is discontinuing Xandr DSP, it’s reinventing it. For publishers, the future lies in Microsoft Monetize, the intelligent hub built to grow their businesses with more control, smarter tools, and better outcomes. 

Microsoft Monetize gives publishers access to premium demand, secure environments, and privacy-forward audience data, all backed by real-time analytics and AI-powered optimization.  

A more intelligent and streamlined evolution of the SSP that is designed to empower publishers. 

With Copilot baked into the core, publishers can manage inventory, boost revenue, and improve user experience, all while maintaining high standards for privacy and brand safety.  

With Microsoft Curate, publishers can monetize proprietary data, tap into unique buyer demand, and build custom marketplaces aligned to strategic goals. 

Cut to the chase 

Microsoft Xandr DSP shutdown is a proactive action in today’s ad tech shift. The focus now is on agentic, AI-first advertising that respects user privacy while delivering measurable impact.