Satya Nadella: evaluation

Transcript context

…Speaking of prices coming down, you recently tweeted after the DeepSeek model came out about Jevons’ Paradox. I'm curious if you can flesh that out. Jevons’ Paradox occurs when the demand for something is highly elastic. Is intelligence that bottlenecked on prices going down? Because when I think about, at least my use cases as a consumer, intelligence is already so cheap. It's like two cents per million tokens. Do I really need it to go down to 0.02 cents? I'm just really bottlenecked on it becoming smarter. If you need to charge me 100x, do a 100x bigger training run. I'm happy for companies to take that. But maybe you're seeing something different on the enterprise side or something. What is the key use case of intelligence that really requires it to get to 0.002 cents per million tokens? I think the real thing is the utility of the tokens. Both need to happen: One is intelligence needs to get better and cheaper. And anytime there's a breakthrough, like even what DeepSeek did, with the efficient frontier of performance per token changes, the curve gets bent, and the frontier moves. That just brings more demand. That's what happened with cloud. Here’s an interesting thing: We used to think “oh my God, we've sold all the servers in the client-server era”. Except once we started putting servers in the cloud, suddenly people started consuming more because they could buy it cheaper, and it was elastic, and they could buy it as a meter versus a license, and it completely expanded. I remember going, let’s say, to a country like India and talking about “here is SQL Server”. We sold a little, but man, the cloud in India is so much bigger than anything that we were able to do in the server era. I think that's going to be true. If you think about, if you want to really have, in the Global South, in a developing country, if you had these tokens that were available for healthcare that were really cheap, that would be the biggest change ever. I think it's quite reasonable for somebody to hear people like me in San Francisco and think “they're kind of silly; they don't know what it's actually like to deploy things in the real world”. As somebody who works with these Fortune 500s and is working with them to deploy things for hundreds of millions, billions of people, what's your sense on how fast deployment of these capabilities will be? Even when you have working agents, even when you have things that can do remote work for you, with all the compliance and with all the inherent bottlenecks, is that going to be a big bottleneck, or is that going to move past pretty fast?…

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