BONUS EPISODE: Interview with Microsoft CEO Satya Nadella

is now? Yeah, I mean it's actually you're absolutely right, which is AI has been here in fact its mainstream, right, I mean, search is an AI product, even the current generation of search, every news aggregation, recommendation, and you know YouTube or e commerce or TikTok or all AI products, except they're all I would say, today's generation of AI is all autopilot. In fact, it's a black box that beaches sort of use that is dictating in fact, how

our attention is focused. Whereas going forward, the thing that's most exciting about this generation of AI is perhaps we move from autopilot to copilot, where we actually prompted. I mean, think about it, right, what we are learning to program AI as with just natural language, right, and it gets smarter every time you use it. Yeah yeah, and also

you are making it. It's just it's ultimately a stochastic machine that you're using as a tool to help reason about what you're learning, what you're creating, what you're doing. And so yes, I think this shift from autopilot to copilot is actually, yes, the next phase of AI, which in fact is perhaps going to put us as humans, you know, more in the center of using AI to our benefit. With Copilot, you are deeply weaving lams across

all of Microsoft's products Word, Excel, power Point, Outlook. You're also basically giving folks their own personal business chatbot. How transformative a change do you think this will be in how we work? Yeah? To me, that is it right. Having built now up Copilot, having built the web co pilot with being, and even what we did with Dynamic, this is the big next step for us to put it in the tools everybody uses every day for their work.

I think it does three things emily for me. You know, one of the things that I've always said is, God, there's so much functionality in Word or Excel and PowerPoint. How do we make it such that people use this in powerful ways to create great content, great documents, great PowerPoint art, learn how to do analysis that's pretty sophisticated in an interesting way. Now without having to say, let me learn all the commanding of office, I just literally

can use natural language. So the power of thirty plus years of office creation, the sophistication of these tools is just available to every user. Same thing with even teams and teams co pilot. I think about how meetings can be more effective team's co pilot, But I think the probably the biggest difference maker will be business chat because if you think about the most important database in any company is the database underneath all of your productivity software.

Accept that data is all siloed today, But now I can queriate with natural I can say, oh, I'm going to meet this customer. Can you tell me the last time I met them? Can you bring up all the documents that are written up about this customer and summarize it so that I'm current on what I need to be prepped for that ability to interrogate that database, queriate and do it without learning some new syntax of querying language. But just natural language is super powerful. How do you

make sure it's not clippy two? Point out that it is helpful, delightful, doesn't want to make me click out a sap. There are two sets of things. One is you know if you're laughing, because because look like our industry is full of lots of you know, examples from clippy to even let's a current generation of these assistants and so on, they all griddle. I think there are two things that this generation of way I do. One is when we say they understand natural language, they truly

understand natural language. So it's not like, Okay, we'll understand you only if you stay in sort of these very narrow rails that we've defined for you. Then the comprehension and what they can do for you right is also not narrow, and so I think that's why. But that said, I think we are also going to have to learn that ultimately these are tools. They're stochastic in nature. Just like anytime somebody sends me a draft, I review the draft,

I just don't accept the draft. We will do that like interesting enough, we learn a lot and get up co pilot. In fact, that first time we get up copiot came even softa abouper saying oh yeah, this does make mistakes, except in even a few months people say, oh yeah, but I know how to correct those mistakes. And so that ability to work with this co pilot, give it feedback, know how to verify it. Even this

chain of thought, reasoning and excel. Like the one feature I don't know if you saw this, but that is very cool, which is we said, okay, what's the design choice we can make so the users get in the habit of not just accepting whatever AI is saying, but even ask it to show you it's scratch bad work. Right. It's literally like inspecting somebody's homework, right, which is, hey, tell me exactly how you did this and so that I can verify. Those are the kinds of things that

we learn. You're trying to reinvent search with this AI powered thing, and I believe it's been using GPT for for a while. Now what's worked? What has it? I think what they're too. One thing that we're learning is the search context, right, So conversational search is a thing. So this grounding of your conversation with search data, I think is one mode. And then there is a completely different mode that we're also learned, which is people just

want to chat. And so we are now getting good at even the product design so that we make that an explicit choice. So for example, when we launched Being, we didn't have these three modes. We now have how precise do you want it to be? Or how creative you want to be or you want to be? Balanced that I think is one of the biggest learnings we launched it at Oh Wow. People do, in fact want to engage even in what is chat inside of search in different ways, and we've got to put the user

control back. How much market share do you think you can really take from Google? Like prediction? Give me. We are a real I'm thrilled to be in search. We're a very small player in search, and I look forward to every inch we gain is a big game. You're coming for Search, They're coming for Office. They're now putting AI in there. You know, Google Docs and cheets and Gmail. Are we just going to see you and Sundar are trying to one up each other every week in this

race to greatness. You know, I just warnt bardon being both to thrive. I just want Google work Space and Microsoft three six five both to thrive. I mean, look, at the end of the day, the fun part of being in this industry and competing is but you know, it's the innovation and competition. Is the last time I checked off a fantastic thing for users and the industry, and so yeah, so let there be good sort of

you know, good innovation coming. And I think you know, Google's going to do you know, is a very innovative company and uh, and we have a lot of respect for them, and I expect us to compete in multiple categories. In my decade plus covering Microsoft, I can't remember you releasing this much in quick succession. Why is it all happening so fast? Yeah, it's you know, it's sort of

sometimes it feels it's all happening fast. It's we started working on this, you know, good four years ago, right, I mean in some sense, if you think about when open ai and Microsoft came together and said, hey, this next generation of large language models need infrastructure. Let's build the infrastructure, tune the infrastructure, Let's understand even what AI safety and alignment looks like for these what are the use cases? And this has been four years plus in making.

So once we started seeing the scaling effects, the promise of the emergent capabilities, even that started showing up in these large language models. That's why last years in fact that perhaps for me, the application of these large language models inside or get up Copilot was the big it's the biggest LM product out there today, and so that gave us confidence that hey, we now can apply it

in more context. So yes, it feels that we've launched a lot of things just in a hurry this year, but it's been four years in the making, and obviously it's a great partnership with open AI. Microsoft just reportedly laid off a team focused on ethical and responsible AI. Meantime, you've got the Center for Humane Technology calling the too AI a RaSE to recklessness. How do you respond to that?

I mean, first of all, in terms of impact on anybody at Microsoft, this is just probably the thing that weighs on me heavily, because after all, any restructuring is hard, hard on the people who are mostly impacted. That said, two things. One is this is no longer a side thing for Microsoft, right because in some sense, whether it's design, whether it's alignment, safety, ethics, it's kind of like saying quality, performance and design, core design. So I can't have now

an AI team on the side. It's all the mainstream. It's sort of like there's no get up. There's no get up without copilot. There is no Microsoft three six five without co pilot. So in some sense, the hard process of companies like ours are going to constantly go through a lot of change, and what you as something that was done on the side today is now mainstream. So that's what's happening. And then I think, if anything, debate, dialogue and scrutiny on what is the space of innovation?

Is it really creating benefits for society? I think are absolutely, and I'll welcome it. Right, I look at them and say, no one can run faster than the benefits to the broader society. And then the norms that we enforce as a democratic society on any technology. And so I feel like we are at the very early stages of it. So I will ask us to be open to it, but at the same time scrutinize it and let's have

a dialogue on what the benefits are. And in that context, let's also recognize, especially with this AI, well why were we not asking ourselves, like the AI that's already in our lives, and how what is it doing? It's right we've gone straight to say, oh, wow, these lns have some hallucination. Guess what. Right, there's a lot of AI that I don't even know what it's doing. And except

I'm happily clicking away and accepting the recommendations. So why don't we in fact educate ourselves to ask all of what AI is doing in our lives and say how to do it safely in our line way. Elon Musk, who co found it open ai and then left, has said it's not what he intended. It is closed, sourced and effectively controlled by Microsoft. How would you respond? Look, I mean, I think, first of all, open ai cares deeply about their mission and doing it in the most

safe way and in the most open way. And in some sense there's an interesting trade between openness and safety. So that is sort of one of the reasons why they have what they have in terms of their governance, architecture and you know, and so therefore at some level they have been very very clear on what principles drive them. Similarly, we have been very very clear on the principles that drive us around AI safety and responsibility, and we'll stick

to them. I have to ask you a question about the economy and whether you're concerned about a prolonged tech bust. I mean, we've seen the collapse of three banks over the course of the last week, including Silicon Valley Bank, tighter money, more uncertainty. How are you thinking about this? I mean, I think at the highest or levels. I think there was an aberration of maybe a ten year period of low interest rates and everything that came with it,

not just in tech but in the broader economy. And I just think that we're just getting back to normal, like at least the thing that perhaps we have to remind ourselves. Mostly the world looked like this, which is interest rates were higher than zero. Inflation was perhaps maybe structurally going to be higher, just given everything that's happening with supply chains in the geopolitics, and we all as businesses have to be accountable to how to manage in

that environment, and tech is one sector. And so I kind of look at this and say, hey, it's a return to normal as opposed to anything sort of that to be we need to be worried about as being prolonged. In fact, this is the long run. The economies have to sort of be, you know, more real. All right, So this is normal to you, I think. So, I mean, I think that sometimes we sort of say, you know, the last ten years can never be sort of the

way way forward on and it's good. I think it's better to have businesses that are run efficiently, that are actually measured on the way both whether it's on the societal impact or on real economic impact. In nineteen ninety five, Bill Gates Centemmo calling the Internet a title way if that would change all the rules and was going to be crucial to every part of the business, is AI

and epic. Yeah. I mean, in fact, I sort of say the chat GPT when it first came out was like when Mosaic first came out I think in ninety three as the first browser. And so yes, it does feel like you know, to the Bill Memo in nineteen ninety five, It does feel like that to me. So it's as big as the enter. I think it's as big. It's just like in all of these things, right we in the tech industry or you know, classic experts and

over hyping everything. So the question is can we really like I hope at least that What motivates me is I want to use this technology to truly do what I think at least all of us are in tech for which is democratizing access to it. So when someone says to me, hey, here is how a farmer in rural India, you know, can use this technology to express a complex thought on how to get a subsidy from a government program and can do that successfully. That gives me a lot of sort of you know, hope. How

confident are you that Microsoft is going to catch the wave? Look? We are you know, at the end of the day, my confidence is high only if I can do useful things every day for users. So in other words, what we did with being, what we did with getub copilot, and what we're about to now do with Microsoft three six five copilot is what gives me confidence. Ultimately, it's not about my confidence, but it's about the products people

use and find useful. I want to ask about jobs because obviously Microsoft makes software that helps people do their jobs, and I wonder if AI laid in software, we'll put some people out of jobs. Sam Altman has this idea that AI is going to create this kind of utopia and generate wealth that's going to be enough to cut everyone a decent size check, but eliminate some jobs. Do you agree with that? You know? Look, I mean you

know from Kenes, do I guess? Altman? They've all talked about the two day work week, and I'm looking forward to it. But the point is, Look, the lump of labor fallacy has never proven out right, which is in some sense there is displacement, and in fact of anything, what we have to do is really do a fantastic job as a society to deal with any displacement. Because one job turns into another job, you have to then

skill people on an other job. And in fact, in an interesting way, here's one thing even in this Microsoft three six five tool, like, there's this power automate tool. Up to now we've called it the low code no code tool for doing workflo automation. Interestingly enough, you now can automate workflows just using natural language. Guess what that means. Anybody who's in the front lines in healthcare and retail

can automate or be part of the IT journey. That to me gives means their new jobs and better wage support. So I feel, yes, there's going to be some changes in jobs. There's going to be some places where there will be wage pressure, there will be opportunities for increased

wages because of increased productivity. We should look at it all and at the same time being very clear eyed about any displacement risk because that one thing that we've also learned in the last twenty years is that any society that doesn't really pay attention to who are the winners and the losers, and to make sure that as a society we are not really you know, imbalanced in it in terms of economic opportunity, will be better off.

I think a lot about my kids and how AI will have something that I don't, which is an infinite amount of time to spend with them, and how these chatpots are so friendly, and how quickly that could turn into an unhealthy relationship or you know, maybe it's nudging them to make a bad decision. As a parent, does any part of that scare you? So that's kind of one of the reasons why I think this moving from autopilot to this copilot hopefully gives us more control, whether

it's as parents are more importantly, even as children. Like one of the things that was very cool yesterday to see in the launch of GPT four was the demo or the launch of Khan Academy stuff. And sal sent me this last night and I was looking at his

algebra class. It was so engaging, right, I mean, think about it, like one of the dreams we've always had is can I have a personalized tutor that is engaging, that is actually trying to teach me so to yours point, I think maybe we should, of course be very very watchful of what happens. But at the same time, I think this generation of bots, in this generation of AI, probably just go from engagement to more giving us more

agency to learn. It's fascinating such a NATA. Thank you, thank you for watching us.