Satya Nadella: belief

Transcript context

…So in fact it's manna from heaven to have these AI workloads because guess what? They're more hungry for more compute, not just for training, but we now know, for test time. When you think of an AI agent, it turns out the AI agent is going to exponentially increase compute usage because you're not even bound by just one human invoking a program. It's one human invoking programs that invoke lots more programs. That's going to create massive, massive demand and scale for compute infrastructure. So our hyperscale business, Azure business, and other hyperscalers, I think that’s a big thing. Then after that, it becomes a little fuzzy. You could say, hey, there is a winner-take-all model- I just don't see it. This, by the way, is the other thing I’ve learned: being very good at understanding what are winner-take-all markets and what are not winner-take-all markets is, in some sense, everything. I remember even in the early days when I was getting into Azure, Amazon had a very significant lead and people would come to me, and investors would come to me, and say, "Oh, it's game over. You'll never make it. Amazon, it's winner-take-all." Having competed against Oracle and IBM in client-server, I knew that the buyers will not tolerate winner-take-all. Structurally, hyperscale will never be a winner-take-all because buyers are smart. Consumer markets sometimes can be winner-take-all, but anything where the buyer is a corporation, an enterprise, an IT department, they will want multiple suppliers. And so you got to be one of the multiple suppliers. That, I think, is what will happen even on the model side. There will be open-source. There will be a governor. Just like on Windows, one of the big lessons learned for me was, if you have a closed-source operating system, there will be a complement to it, which will be open source. And so to some degree that's a real check on what happens. I think in models there is one dimension of, maybe there will be a few closed source, but there will definitely be an open source alternative, and the open-source alternative will actually make sure that the closed-source, winner-take-all is mitigated. That's my feeling on the model side. And by the way, let's not discount if this thing is really as powerful as people make it out to be, the state is not going to sit around and wait for private companies to go around and… all over the world. So, I don't see it as a winner-take-all. Then above that, I think it's going to be the same old stuff, which is in consumer, in some categories, there may be some winner-take-all network effect. After all, ChatGPT is a great example. It's an at-scale consumer property that has already got real escape velocity. I go to the App Store, and I see it's always there in the top five, and I say “wow, that's pretty unbelievable”. So they were able to use that early advantage and parlay that into an app advantage. In consumer, that could happen. see it's always there in the top five, and I say “wow, that's pretty unbelievable”. So they were able to use that early advantage and parlay that into an app advantage. In consumer, that could happen. In the enterprise again, I think there will be, by category, different winners. That's sort of at least how I analyze it. I have so many follow-up questions. We have to get to quantum in just a second, but on the idea that maybe the models get commoditized: maybe somebody could have made a similar argument a couple of decades ago about the cloud – that fundamentally, it's just a chip and a box. But in the end, of course, you and many others figured out how to get amazing profit margins in the cloud. You figured out ways to get economies of scale and add other value. Fundamentally, even forgetting the jargon, if you've got AGI and it's helping you make better AIs – right now, it's synthetic data and RL; maybe in the future, it's an automated AI researcher – that seems like a good way to entrench your advantage there. I'm curious what you make of that, just the idea that it really matters to be ahead there.…

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