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…key thing to be challenged, or rather really solved well. Because going to a small merchant and saying, “Hey, you go stand up an MCP server, do this protocol, that protocol…” What's the “easy” button? I think the other thing that we're going to see is—you're probably seeing this already—emerging of a bunch of the agentic experiences. So we're talking about agentic commerce here. We had Des Traynor from Intercom. They're now doing customer service AI mediated and just replacing humans doing customer service with AI. But what they're seeing obviously, is a huge amount of induced demand where people initially come for the help desk type queries and then it's like, “Wow, this is honestly a much better way to navigate the website” and it's almost like a command line. Anyway, it can't quite take as much actions now as it will be able to, but I also wonder how much all these experiences merge where we're doing the buying stuff over here that is growing and expanding and maybe there's some discovery and things like that. They're doing the customer service stuff over there— It's universal. Yeah, that's a good point. When does it become a command line application? Again, my example of this is, I find the fashion space interesting where how incredibly poor the tech is with a lot of websites out there. Where people are trying to this very aesthetic vibe space, “I'm looking for something like that, but a little more fancy whatever,” and it's all keyword-based search and manual tagging and things like that. And things like that feel to me perfectly set up for having an interactive AI-based experience where again, your Midjourney prompts, you're like, “No, the image wasn't quite right. Change it in this way.” Just doing that with commerce I think will be really interesting. Makes sense. And I also think intuitively, all of us are inside sales, or other customer service is also inside sales. And so intuitively that makes sense and definitely in the agentic world you can stitch these things together so that the seams are not like what they are today. customer service is also inside sales. And so intuitively that makes sense and definitely in the agentic world you can stitch these things together so that the seams are not like what they are today. Maybe what we're describing is a bunch of swim lanes have been established by random accidents of software and org charts and everything like that. “You do customer service when people come with a query of a non-commercial nature. You are an SDR. You do whatever…” And all those distinctions are probably going to get going. We're talking a lot about the AI apps that people use and Copilot and ChatGPT and Gemini and all these kinds of things. There's a debate about how much model quality matters and is it the case that people pick a brand and they've been drinking Coke for the longest time and even if Coke… I mean Coke's a bad example, because there was a revolt about the change in the formula, but even if they change the formula people, they still have a preferred brand. I use o3, my wife uses GPT 5. I'm almost horrified because I’m like, “You deserve more intelligence than that and you can take o3 from my cold dead hands.” Where do you stand on the debate of do people have loyalty to—and there was also the revolt when they tried to take away 4.0, was it? And people were really attached to that model. Do people have loyalty to a model or do they have loyalty to an AI brand and how does this affect your business strategy? I think that in consumer products, this was the first time we saw that when you changed models, they're not sort of uniform changes and they impact people differently. And personality is one such thing or style or what have you. And so it just sort of is a new dimension. So in other words, it's also an argument that, oh wow, this is a new dimension of perhaps differentiation. There's the IQ side of it, there's the EQ side of it, and then there is all these style points and maybe that's kind of one of the things that people will steer things towards. Will everyone’s preference not just be for more intelligence? I'll go into the picker and manually select o3 for “Where should I go get ice cream” query. I always want the most— That's habit, don't you think? Maybe, but it's also an important considered decision. But it is true. I mean it's very hard for any of us to take our—that's why defaults matter and we love our defaults. We don't love the cheese to be moved. Even the model selection stuff, it's kind of like, “Wow, if you now took away the model selection, it's a problem” and so therefore you got to be careful. But I do think in the long run, if I can trust, that's another one, which is if I can trust something to always do something for me while it's making a selection that somehow is delightful, then that's when I'll hand off. And so you think that's what you need to get to is me trusting that you'll pick an appropriate model? Exactly. while it's making a selection that somehow is delightful, then that's when I'll hand off. And so you think that's what you need to get to is me trusting that you'll pick an appropriate model? Exactly. Yeah. And then I mean my mental model of Microsoft is that you just play at every part of the stack in that there’s the—you have Copilot, you have your stake and OpenAI, you have… Well, we can get to vertical applications in AI, you have the Azure layer, you have chips, everything leaving out a whole bunch of stuff. Are some more important to you than others? What is the must win? Will you do verticals? Yeah. Well, at the core, the way I kind of conceptualize it is our infrastructure business. We have to be fantastic at building what I'll call the token factory. This is the tokens per dollar per watt, really being super efficient at that. Then I'll say we have another layer of it, which is the agent factory and the difference between the token factory and the agent factory is use the tokens most efficiently to drive a business outcome or a consumer preference outcome, which is— That's about the value per token or something, The value per token and as evaluated by the specific domain that people care about. And that is to your point, it has tooling around it. It has a whole, it's kind of the new app tier or the app server. Every new platform has always had, there was the web and there was a web server. This is the AI server in some sense or the AI cloud. Then we will definitely want to build our own, I'll call it systems of intelligence or AI systems that is the family of Copilot. Whether it's for information work, that's kind of what we've done for coding or software development. That's the GitHub Copilot, security’s another domain where we are absolutely going to be a primary. Those would be the three horizontal. We will also have business applications. The other one is we are doing a lot in health and science. As a platform company, you always have decisions around when should you try and bundle products together? When should you try and staple them and mandate they be used together and when should you not? And I think the classic example for some reason that everyone talks about despite it being quite minor, is the fact that Apple originally only, let's use an iPod with a Mac and tried to use it to drive Mac sales, and then gave up and shipped out iTunes for Windows. And my understanding reading the Apple in China book is it was a totally random decision that someone just made one day, but it's often held up as one of these examples. Obviously Microsoft, the entire history is full of these interesting examples. I don't think people realize how open Microsoft was in the early days where in 1985 most of Microsoft's revenue was from Macintosh applications and then for the Microsoft operating systems, most of the applications were third party like Lotus 1, 2, 3 and things like this.…

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