Satya Nadella: prediction

Transcript context

…As we look across the world, America has dominated many tech stacks. The US owns Windows through Microsoft, which is deployed even in China, that’s the main operating system. Of course, there’s Linux, which is open source, but Windows is deployed everywhere in China on personal computers. You look at Word, it’s deployed everywhere. You look at all these various technologies, it’s deployed everywhere. And Microsoft and other companies have grown elsewhere. They’re building data centers in Europe and in India and in all these other places, in Southeast Asia and LatAm and Africa. In all of these different places, you’re building capacity. But this seems quite different. Today, the political aspect of technology, of compute… The US administration didn’t care about the dot-com bubble. It seems like the US administration, as well as every other administration around the world, cares a lot about AI. The question is, we’re sort of in a bipolar world, at least with the US and China, but Europe and India and all these other countries are saying, “No, we’re going to have sovereign AI as well.” How does Microsoft navigate the difference to the 90s—where there’s one country in the world that matters, it’s America, and our companies sell everywhere and therefore Microsoft benefits massively—to a world where it is bipolar? Where Microsoft can’t just necessarily have the right to win all of Europe or India or Singapore. There are actually sovereign AI efforts. What is your thought process here and how do you think about this? It’s a super critical piece. I think that the key, key priority for the US tech sector and the US government is to ensure that we not only do leading innovative work, but that we also collectively build trust around the world on our tech stack. Because I always say the United States is just an unbelievable place. It’s just unique in history. It’s 4% of the world’s population, 25% of the GDP, and 50% of the market cap. I think you should think about those ratios and reflect on it. That 50% happens because quite frankly the trust the world has in the United States, whether it’s its capital markets or whether it’s its technology and its stewardship of what matters at any given time in terms of leading sector. If that is broken, then that’s not a good day for the United States. We start with that, which I think President Trump gets, the White House, David Sacks, everyone really, I think, gets it. So therefore I applaud anything that the United States government and the tech sector jointly does to, for example, put our own capital at risk, collectively as an industry, in every part of the world. I would like the USG to take credit for foreign direct investment by American companies all over the world. It’s the least talked about, but the best marketing that the United States should be doing is that it’s not just about all the foreign direct investment coming into the United States, but the most leading sector, which is these AI factories, are all being created all over the world. By whom? By America and American companies. And so you start there, and then you even build other agreements around it, which are around their continuity, their legitimate sovereignty concerns, around whether it’s data residency, for them to have real agency and guarantees on privacy, and so on. In fact, our European commitments are worth reading. We made a series of commitments to Europe on how we will govern our hyperscale investment there such that the European Union and the European countries have sovereignty. We’re also building sovereign clouds in France and in Germany. We have something called Sovereign Services on Azure, which literally gives people key management services along with confidential computing, including confidential computing in GPUs, which we’ve done great innovative work with Nvidia. So I feel very, very good about being able to build, both technically and through policy, this trust in the American tech stack. How do you see this shaking out as you have this network effect with continual learning and things on the model level? Maybe you have equivalent things at the hyperscaler level as well. Do you expect that the countries will say, “Look, it’s clear one model or a couple models are the best, and so we’re going to use them, but we’re going to have some laws around the weights having to be hosted in our country”? Or do you expect that there will be this push so that it has to be a model trained in our country? Maybe an analogy here is that semiconductors are very important to the economy, and people would like to have their sovereign semiconductors, but TSMC is just better. And semiconductors are so important to the economy that you will just go to Taiwan and buy the semiconductors. You have to. Will it be like that with AI?…

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