Satya Nadella: prediction

Transcript context

…By the way, I love this chart. I love this chart for so many reasons. One is we’re still on the top. Second is all these companies that are listed here are all companies that have been born in the last four or five years. That to me is the best sign. You have new competitors, new existential problems. When you say, who’s it now? Claude’s going to kill you, Cursor is going to kill you, it’s not Borland. Thank God. That means we are in the right direction. This is it. The fact that we went from nothing to this scale is the market expansion. This is like the cloud-like stuff. Fundamentally, this category of coding and AI is probably going to be one of the biggest categories. It is the software factory category. In fact, it may be bigger than knowledge work. I want to keep myself open-minded about it. We’re going to have tough competition. That’s your point, which is a great one. But I’m glad we have parlayed what we had into this and now we have to compete. On the competing side, even in the last quarter we just finished, we did our quarterly announcement and I think we grew from 20 to 26 million subs. I feel good about our sub growth and where the direction of travel on that is. But the more interesting thing that has happened is, guess where all the repos of all these other guys who are generating lots and lots of code go? They go to GitHub. GitHub is at an all-time high in terms of repo creation, PRs, everything. In some sense we want to keep that open, by the way. That means we want to have that. We don’t want to conflate that with our own growth. Interestingly enough, we are getting one developer joining GitHub a second or something, that is the stat, I think. And 80% of them just fall into some GitHub Copilot workflow, just because there are. By the way, many of these things will even use some of our coding code review agents, which are by default on, just because you can use it. We’ll have many, many structural shots at this. The thing that we’re also going to do is what we did with Git. The primitives of GitHub, starting with Git, to issues, to actions, these are powerful, lovely things because they kind of are all built around your repo. We want to extend that. Last week at GitHub Universe, that’s kind of what we did. We said Agent HQ was the conceptual thing that we said we’re going to build out. This is where, for example, you have a thing called Mission Control. You go to Mission Control, and now I can fire off. Sometimes I describe it as the cable TV of all these AI agents because I’ll have, essentially packaged into one subscription, Codex, Claude, Cognition stuff, anyone’s agents, Grok, all of them will be there. So I get one package and then I can literally go issue a task and steer them so they’ll all be working in their independent branches. I can monitor them. I think that’s going to be one of the biggest places of innovation, because right now I want to be able to use multiple agents. hey’ll all be working in their independent branches. I can monitor them. I think that’s going to be one of the biggest places of innovation, because right now I want to be able to use multiple agents. I want to be able to then digest the output of the multiple agents. I want to be able to then keep a handle on my repo. If there’s some kind of a heads-up display that needs to be built and then for me to quickly steer and triage what the coding agents have generated, that to me, between VS Code, GitHub, and all of these new primitives we’ll build as Mission Control with a control plane. Observability… Just think about everyone who is going to deploy all this. It will require a whole host of observability of what agent did what at what time to what code base. I feel that’s the opportunity. At the end of the day your point is well taken, which is we better be competitive and innovate. If we don’t, we will get toppled. But I like the chart, at least as long as we’re on the top, even with competition. The key point here is sort of that GitHub will keep growing regardless of whose coding agent wins. But that market only grows at say 10, 15, 20%, which is way above GDP. It’s a great compounder. But these AI coding agents have grown from say $500 million run rate at the end of last year—which was just GitHub Copilot—to now where the current run rate across GitHub Copilot, Claude Code, Cursor, Cognition, Windsurf, Replit, OpenAI Codex… That’s run rating at $5–6 billion now for the Q4 of this year. That’s 10x. When you look at the TAM of software agents, is it the $2 trillion of wages you pay people, or is it something beyond that? Because every company in the world will now be able to develop software more? No question Microsoft takes a slice of that. But you’ve gone from near 100%, or certainly way above 50%, to sub-25% market share in just one year. What is the confidence that people can get that Microsoft will keep winning?…

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