I was not prepared for how cold it would be here.
Hawhi girl and me is dying today. I'm on Microsoft's campus in Redmond, Washington.
Ran It's so wonderful to be here with all of you.
Is celebrating fifty years of Microsoft.
The company just celebrated its fiftieth anniversary, and Bill Gates, Steve Balmer, and Sachiinadella, the three CEOs who've led the company over those five decades, were all there to celebrate.
I wrote more code than either of these guys.
In March twenty fourteen, a month after Sachiinadella took over as CEO, Steve Balmer told an audience at the Oxford Union that his main requirement when finding a successor was ambition.
There's an old movie they say relationships are like sharks. They either move forward or they die. Well, I can tell you technology businesses are like sharks too. You either move forward ambitiously or poof.
Microsoft's business has thrived under Sacynadella. Microsoft hire after beating on almost every metric.
This is once again as you just saving the day. What a time to be a holder of Microsoft shares. A stock has just performed phenomenally.
But With the emergence of AI, the company faces arguably the most transformative era in technology yet. On this week's episode of the Circuit, we had a chance to dive into the past, present, and future of Microsoft, and here on the podcast, we're sharing our interviews with the three CEOs who made the company what it is today. First up, Microsoft co founder Bill Gates. Ready, okay, Bill, Happy birthday, Thank you fifty years. You're known for your predictions. What's
the most surprising thing to you about today? Like something you didn't predict?
Well, I, ever since I started Microsoft, I've always thought, oh my goodness, what is it we might miss? You know, so there have been so many twists and turns in the technological road. When I was in charge, you know, I set up all night thinking, you know, we're going to miss this, We're going to miss that. The fact that we've been able to navigate this changing environment, first under my leadership, then understy Bamber's and now Undersat is kind of a miracle to me. You know, we've always
had smart people. I did that software is important. We were truly right about that. But you know, here we are, and now you know, the road's got all these AI twists and turns that saught to you with a little bit of advice from Steve, and I gets to drive the car around these curves.
There's been so much reminiscing on stage. We heard a lot of fun old sounds. Be honest, do you still get excited when you hear the Windows startup sound?
It reminds me of a magic time. You know.
It was right here on the Microsoft campus that we had that Windows ninety five introduction. You know, we had jay Leno and it was kind of maybe the time when people realized Microsoft was quite a unique company. That office had come together, the graphics, c inerface had come together, you know, on all the different systems, whether it was Apple, Macintosh or Windows on the PC, we were providing the top application. So that was definitely a fun day that showed that we.
Had some special sauce.
So it's nineteen seventy five.
What's going on inside Bill's bring, Like, did you and Paul think you had something this big in your hands?
Well, we knew that software would be important, you know, we said when people thought it was crazy, a computer on every desk and in every home, and so we saw this tool of empowerment We're always worried that once somebody realized what we realized, that they might you know, do a good job as well. So, you know, why didn't IBM, who had all the capital in the world and great people, why couldn't they do what we did?
And we thought, well, we're more dedicated to software. We're going to hire you know, energetic people, We're going to price this stuff super super low and make it available to everyone. But we were you know, humble about how unique we would be, knowing though that software and software empowerment was the coolest thing going on, and even today, if you look at you know, which companies are valuable, it's really the ones that have ridden that digital software
empowerment wave. So our vision really was as true as we could have dreamed.
What was the scariest this might not work moment along the way.
Well, there were times in our relationship with IBM that were very complicated, Very early on in the history of the company, which I talked about in source Code. We had a dispute with our customer. They weren't pain us, and so you know, thereafter I said, I'm going to have enough money in the bank to pay everyone salary for a year, even if nobody pays me anything. So I was very conservative financially, and you know, we're lucky that software business until it comes to these cloud days.
It wasn't a very capital intensive business.
Wasn't there a point where you couldn't pay for the chairs and they were literally pulling the chairs out from underneath.
That's okay, that's even before Microsoft. That's when I was in high school. We were always trying to find computers. And the company that was here in Seattle using a great computer, had a deal that if we could find bugs, they wouldn't have to pay for their computer. Unfortunately, they didn't find enough customers, so they went bankrupt. And so we saw, you know that even great companies like Winging Computer,
which was incredible, you know, disappeared. We actually had that sense of, okay, you've got to be very careful in order to survive ups and downs.
I'd love to hear how you reflect on Microsoft era's Taylor Swift style. So humor me, what would be the chapter of each what would be the title of each chapter or era, and what was a lesson that you learned in each?
Well, there's the early what i'll call eight bit computers. Where it went to where you know today people probably remember the Apple two, the TRSAD, the Commodore pat. Those were the first computers that sold literally in the millions, and all of them included Microsoft basics. So the reason you could write a program try things out was because
because we'd worked with each of those companies. Then the IBM PC comes along, and we work with IBM and do all the software for that, including the operating system. The power is stepped up, and you know, so the applications are more demanding. You start to have big discs, hard disks. Then we get to the graphics interface era, and this is where Windows and the Macintosh come in and your interface instead of just being a bunch of characters,
you get the mouse, you get whatever you want. That's where Windows ninety five and Office ninety five come in, and that is an incredible period. Then the Internet phase starts and people are like, okay, does Microsoft get the browser and the Internet and all these things? And we managed to show that we did. Then after that, I'd say, you know, the cloud computing peace becomes very big.
Uh.
You know, Amazon does a very good job with that. At the start, Microsoft comes in with Azure. You know and now here we are at the beginnings of the AI era.
I understand that you spent a lot of time succession planning and passing the rains, planning to pass the rains. What's the key to building a company that outlast its founder.
Well, we're very lucky that, you know, Steve worked with me for a long time, and so when he took over, I stayed for eight years as chief technical officer.
Uh.
And he did an incredible job nurturing a lot of candidates you know, sought to emerge. Is the clear choice. Both Steve and I were very clear that he was the right person. He very much stood out uh. Uh, and he's actually exceeded our expectations. Now he gets to pick the fourth CEO. He's got an incredible team of people that, you know, help him do the job. It's
a much more complex job today. I have to say, I'm in great admiration uh for how zen he is that, you know, picking the things he's going to focus on and all the you know, uh choices.
Uh.
He's very good about drawing both Steve and I in, you know, so whatever expertise we have, uh, he gets the benefit of that, you know. So I think he's kind of a model. He's he's do He wasn't there in the early days, and yet you know, of all the tech companies, I think he's he's been the best at caring Ford. Even the original spirit of what made Microsoft special.
Looking back, it wasn't always easy. I mean Microsoft went through some tough times. You went through some tough times, You were criticized for your aggressive business tactics and being anti competitive.
How do you reflect on that period?
Well, we were so successful and one of the great rewards if you're you know that successful, is the government comes in and says, okay, you know, do they have to do things to help out your competitors?
Did you follow all those rules? So yes.
At that same time as the Internet error was coming along in the nineties, we were involved in a US government lawsuit and I put a lot of time into that. Originally Bill Nucum was our top layer. Then Brad Smith came along, and you know, those weren't ec days. It's pretty amazing. There was never any period where we were losing money. You know, Microsoft, We've never had a year
where we lost money. And so the financial strength because we were so right about software and we were so good about building up globally that we had the problem you could says sort of, you know, kind of a problem of hyper success, and we were able to work a settlement out with the government, and you know, we've been a lot more aware of Okay, let's constantly be in touch with the governments around the world, make sure
they're good with what we're doing. And so we haven't had anything intense like we did there in the late nineties.
You've seen how text form factor has changed over the years as technology has progressed from the PC to laptops to phones. How do you see AI transforming software and what will be the ultimate form factor?
Well, in a way, you won't even think about the form factor. I mean, you'll certainly have something in your ear, you know, you'll have something in your glasses. All the different wall surfaces will be able to light up as displays, you know, wherever you are, and we'll see, okay, there's
a display over there. I can put the information there for you, so it'll be a bit more disembodied that your agent will interact with you just voice to voice as you're walking down the street, or you can pull out a phone size screen uh, you know, have projections onto the glasses and so the hardware piece.
Will just kind of be seamless.
But the software has got to work on every one of those form factors. You're not going to have one agent on the phone another one on your PC. It'll be holistic because it'll know you your preferences. You'll trust it to help do things for you.
How will the AI wars play out?
Like does it feel different than the mobile or the browser wars?
Like who wins?
We well, we don't know.
We know that the level of investment by the leading companies is pretty mind blowing. You know, Google's a great company, Microsoft Open Ai, you know we're out there, you know every day, you know, making Copilot better, and we saw a lot of great demos of you know how that's evolving. I do a lot of product reviews with Mustafa and the other key Microsoft engineering leads. You give them my advice on trying to make Copilot be the best it can be.
You joked on stage that Copilot might be the CEO in fifty years. But more seriously, you've said that the age of complete human dominance will be over in ten years.
What does that really.
Mean for us?
Well, what it means goes beyond you know which company actually delivers that or what their stock price is. It's a much more profound thing than just like the Browser Wars, where I mean it didn't matter to people really who won the Browser Wars. Here, the capacity, the intelligence will give humans a lot of choices. You know, we won't have a shortage of mental health therapists or people who can help us plan things, and.
So it'll three up a lot of time.
It'll give us ways of being educated that we've never had before. I in my Foundation work are thrilled that in places where you don't have as many teachers available, you don't have doctors available, that we'll make sure that the brilliant work here gets out to even the lowest income countries at about the same time it's getting out to the very, very rich countries. And so my work for Microsoft helps me inform how the Foundation can play its unique role.
You release some of the original code for Microsoft, and I'm so curious how you think about what should kids be studying these days?
Like should kids still be learning how to code?
Or is this the beginning of the end of programming as we know it?
Well, you always want to understand the underlying things. You know, like mathematics is important even though the computers you can do the multiplications faster than you can. You know, for anybody who's interested understanding AI and how it works, you know, I think there's great value in seeing, Okay, whatever it's shortcomings, what do we still need to do even to be very good at using AI as a tool the same way that you know, Microsoft Office became sort of a
basic set of skills. Now working with these AI agents, including Copilot, is you know, how you can actually organize your learning, advance your learning, and think, okay, this is how I would use this in the job I'm going to have.
So what's going to be the IT job of the future. If it was a software programmer in your era.
Well, I'm not sure there's any IT job. I mean, you don't want somebody If you love math and software, great, go be a software programmer. But that was you know, the percentage of the labor market that was, you know, nerding people like me. You know, where you'd be writing code,
you know, is pretty modest. If you love that, great, you know, you're always the thing that you like, whether it's you know, being artistic or being a great communicator, or you know, understanding you know how people get sick and counseling them. That all about those capabilities where you bring it as a human I think will still be fairly important. But it is a period where answering these questions is probably harder than at any time in history.
Humor me for a moment about you know, what's going on in the in the broader world right now, President Trump?
These new tariffs doge? Is he going to be good.
For the economy, good for innovation? And how do you think this moment will go down in American history?
Well, there's you know a lot of things are being changed. You know, I think the willingness to look at some government things and say they should change. You know, there's nothing wrong with that, but you know, being careful about Okay, let's change the things we should and preserve some of the things that are good. And you know, my full time work is the Gates Foundation, and there I'm in a constant dialogue with the administration about Okay, how are
they reshaping their aid programs? You know, are they willing to preserve some significant portion of those?
You know? And I think we'll figure that out.
I think the US wants to be helpful to everyone in the world to help save lives.
You know, we have a history.
Actually, President Bush started a program that saved tens of millions of lives in the US, has helped buy vaccines for children, and so that's where I have my deep involvement because I put my money into those things, and the US government, you know, has always been a fantastic partner.
How confident are you that AI's promise will outweigh the perils.
I'm not confident, but the you know, that's that's what we need to get oriented around. That's why I was surprised to I wasn't really an issue in the last election. It's definitely got to be shaped, you know. Mastafa Suliman has a book that warns of some of the challenges called The Coming Age. Read Hoffmann, a Microsoft board member, has a book Superagency, that talks about some of the promise. I'd say both of those are worth reading because they're
both right. It's very promising, but it will bring new challenges along with it.
So you know, all of that considered, what in your mind, what is Microsoft in fifty more years? Like, will Microsoft change the world again.
Well, we're in the process of change in the world again. Just you know, the way that customers today are able to automate things, the way that you know all these tools, and you know Microsoft's putting out eighty billion dollars of investment. You know, clearly that's the sense that, Wow, we have something that customers are going to want or we'll to invest at a level that's completely unheard of. I mean, that's it's a pretty mind blowing number.
It's I mean, you're famous for your predictions. Hearing you say you're not confident is kind of scary.
Oh, people should think through how is AI going to reshape our lives?
It is.
It is a profound change agent. And uh, you know, I don't think it should just be the people who know the technology, because there's a lot of choices about how it gets used. It will change learning, it will change the job market, and you know, I think we can shape that in.
The right way.
But it'll be you know, just like nuclear energy, nuclear weapons, it'll.
Challenge us.
Bill Gates, thank you so much for doing this. On that optimistic note, here's to another fifty years. Congratulations, Thank you, Thank you, Bill. After the break Steve Balmer and now my extended conversation with former Microsoft CEO Steve Balmer. So, Steve, you brought it on stage, but at your twenty fifth anniversary you jumped out of a cake.
I want to do over.
I didn't even remember that.
I'm not.
How did it feel to be all back together for the first time in a while.
It felt good, It felt really good.
Actually, you know, it.
Wasn't just being together, but it was in a particular setting, a little reminiscing, but a lot of future Because for Bill, for me and Forsatya, it is great to reminisce, but we're always thinking about, Okay, what happens tomorrow, what's going to happen tomorrow? Will the company keep going? And we had a chance not only to do a little reminiscing, but at least amongst the three of us had a little on stage.
I understand that that Bill spent a lot of time succession planning when he handed the rings to you, and that you also spent a lot of time succession planning when you pass the rings to Satya. What's the key to building a company that outlasts its founder? You know, talk to me about how deliberate you were about that process.
Well, you know, kind of super deliberate at my level. No, I didn't found the company.
But fear like the heart of the company, but just about.
I mean, there were only thirty people when I joined. I had a chance to shape the whole culture of the place when it was small, and so in a sense, I think Satya takes that burden of being the first completely separate, and I think he's done a fantastic job. And I will say put he having him available to take the job and doing such a good job, that's kind of accomplishment one the company. Everything three times is big. Revenue three times is big. Profit is three market caps
more than three times, it's big. All good by me. I was joking with Sachi. He was talking about their kind of executive retreat whatever. They got about three times as many people at that than we had when I left. So you know, everything is scaled so much. It's amazing. And it's because you know, if you look at Sachi's career, we're actually pretty deliberate about getting him. You know, it
was clear early how talent he was. So if you look at the number of areas in which he worked, he worked in our search business, he worked in the business applications area, he worked in servant tools, and so it's experience culture, and if Microsoft's going to be here even in ten or fifteen years, it'll be innovation serving customers culture.
It wasn't always easy between you and Bill. You've talked about the times you didn't speak to each other, like what happened and what did you learn from that?
Well, I think it's let me put it this way, the day I walked out and retired was the day I retired. I think I went to one more board meeting after that, but it was super important to let Satchya have his space. And I think that was a key learning because when Bill and I we sort of had a long handoff. I was CEO in two thousand and then he announced in oh four he's going to leave completely, but that wasn't until eight and so in a sense, the long goodbye, I think is difficult because
role reversal is difficult. And I think i'd learned that enough to say, look, I love you. I might think I have a lot you can learn from me. And I said to him, but don't listen to old CEOs, former CEOs or former CEOs. You're going to know what to do, and anything you don't know, you're going to figure out. And you know, you'll call or I'll call and we'll brainstorm something. But he's the expert, and all I'm doing is sort of throwing in ideas that you know,
I'm a relatively smart guy. I know a little bit. But ultimately he's got to assemble all of this stuff. And I think getting a little separation was good, and I learned that from the more difficult separation of eight years that Bill and I had. I mean, it wasn't difficult in all eight years, but you know, it made it harder.
I think, you know I miss bomber style product launches.
You have to miss it. Do you miss it?
Well, I just did a big product launch. It's called Into It Dome our new stadium. No, seriously, it was like a product launch we weren't on in this case. We worked on the thing for nine years. I put blood, sweat and tears in it, every detail that product, and we launched it. Now get won every nine years, so well not now now, hopefully it's fifty years from now. So in a sense, yeah, it's fun. It is fun to say we've done this great thing.
Please take a look at it, and we love it, and wow, look at how it does this, this and this, and you can be enthusiastic about it and it's fun to actually then take the next step to bring it to customers.
And see what they really think, not just what they applaud when you launch it.
Do you think do you think Tack's too serious?
Now?
I mean in there, I was like, man, I miss this, you know, I don't really have a feel for that. I think, you know, I always thought, Okay, you're gonna have fewer characters, you know, Bell Gates a character larger than life, or Larry Ellison a character larger than life. Steve Jobs obviously, and yet I think there's still some characters Sam altonon and other characters I eat, big, larger than life personalities. So, in a sense, is it too serious?
I don't know that. I would say that the AI thing is tricky because if you don't seem serious enough, then people won't trust you with the privacy. You know, the issues that AI generates uniquely. So I see a little bit less of the hey, let's.
Do the Yeah.
The big joke or thing is it's just tougher with these kinds of products.
Well, speaking of characters, developers, developers, developers developers.
But is AI going to make engineers obsolete?
AI is going to vastly change the way software gets built. It will, and yet there's still going to be people who have to figure out what the world needs how to give it to them. They may do different skills, they may do things in different ways. But the notion that there are people who are generating great ideas, maybe great ideas that they get helped to generate by the AI itself, I think that's important. Now, will all of the code crunching activities of yesterday be around tomorrow? No,
A lot of those will go away. But I'm an optimist. People say, oh, you know, are you going to put people out of and this happened every time. You know, Will this cause a loss of jobs? Will that costs a lot of jobs? You know what I'd say? Somehow, the world's always created new jobs. It can be hard the dislocation. People say, oh, shoot, it's my skills it became obsolete, But there will be new important skills people need with AI.
How confident are you that Microsoft can make products that people really love and not just products that people need.
You know that that has to do with a number of things, not the least of which is having talent that brings I'll call it the delight point of view. I think there needs to be a productivity.
Point of view.
I mean, that's important to get things done in the world, but there needs to be this sort of consumer delight thing. And you know, Sacha as we had to do. As Sacha has to do, you got to bring in the right kinds of talents. And Mustafa who's the CEO of the AI group, I think he's got that right kind of delight and personality if you will, to bring to the product. So yeah, I think it'll be a product that delights, not just helps you be productive.
All right, there's a couple more questions, if you will.
Microsoft caught so many technological waves. Sacha gives you credit for seeing the cloud, but the company missed.
Mobile and social and search. Do you ever look back and think, what.
If not too much? Actually did the company meet miss search? No, because all the stuff, including Sacha who worked on that stuff, all that stuff is now fundamental to what's going on in AI. So yes, there was a psychle of it. The company missed, and yet I'm super happy that the company. It enhances the company's position. The one I would would highlight is the intelligence that you carry with you, I e.
Your phone.
Now, well that change and will move to wearables. Yeah, I think probably that's true. That's the one I say. And I know why I we missed it missed, meaning we don't have a strong position and we have no position anymore. But I think that the company has really thrived despite that, and I'm proud of that. I'm proud of that. And you know, are there things that Sacha
is missing right now? I'm sure you know, fifteen years from now, he'll look back and say I could have done that one sorry, oh shoot, could have done that one better.
But he we'll bleep you out.
Okay, last question.
You're kind of like the heart of Microsoft. How does now come heard of the glory days? I mean, I see you jumping around on the basketball court and you're doing your philanthropy.
Will anything really compare?
Well? Yeah, I mean, look, I like to be excited. There was so much to be excited about at Microsoft. We're doing great things and you know, trying to really if you will be cheerleaders for a whole industry, and that was a lot of fun. Now I'm still cheerleader, I'm just cheerleading for a much smaller group of people. We're never going to have more than five guys playing at a time and probably fifteen people getting dressed. But you know, I love that. I love the energy, I
love the complexity. You know, I'm very much not the person who's operating day to day, which I was here, and that that's kind of right for me at this phase of life. But you know, the intricacy thinking about things and then cheerleading. I still love that.
I did see some footage of you jumping into Lake Bill, so I'm kind of wondering what we didn't see.
Probably a ton.
All right, Steve, that was awesome.
Congratulations Developers, Developers, Developers, Developers, Developers, Developers, Developers, developers, developers, developers, developers, Developers.
On May nineteenth, Microsoft held the opening keynote for BUILD, its annual developers conference.
Good morning, and welcome to Build.
To get an idea of what Microsoft was like when Sachiinadella took the helm, all you have to do is go back to the same keynote event from the year he became CEO in twenty.
Fourteen, Windows Phone, Windows Phone and Windows Phones Windows Phone, Windows Phone eight.
Point one, Windows Phone was mentioned over one hundred times. Just three years later, Zero sach An Adella successfully shed Microsoft of its fledgling consumer products and transform the company into a cloud infrastructure juggernaut with Azure. But this year there's a different product you'll here mentioned Endless.
Cool Pilot, col Pilot, cool Pilot, co Pilot.
Co Pilot, Microsoft's gateway to all things AI dominated this year's build keynote. It's clear where Microsoft is staking its future. I sat down with Nadella at Microsoft headquarters to discuss how he got started at the company and where he sees it going in the future. So good again, Thank you for doing this and thank you for coming up. It's been so fun going through fifty years of history.
How does fifty feel to you?
It feels young, be honest.
Do you still get excited when you hear the Windows startups sound?
Absolutely?
I mean it's kind of like one of those it feels like, you know, without it, there is no day that you can start.
Well.
Some of among my favorite clips, I found this one. This is a classic throwback video.
Four being a data my daughter makes a lot of fun. What I'm going to do now is exit out of this.
And so you're a technical product manager here you're demoing Excel.
Who's that guy, Like, what's he thinking at that time?
Yeah, it's sort of like, it's it's funny that you mentioned that, because it is an Excel demo with a I think a dB two connector back to at that time a mini computer and it was the beginning of that client Silver era and the this last weekend, for example, I was thinking, God, like, what can I build today? And thanks to this get Up Copilot age, you know,
I went and built. In fact, you know, recreated what Bill had done with the Altair, which is the basic interpreter, except that he I guess he had to spend multiple nights to do that, and we were now we can do it thanks to Get Up Copilot in minutes and that excitement of being able to use technology to create more technology. I think it's what brought me to Microsoft, has got me to do what I was doing at Microsoft,
and is sort of what keeps me at Microsoft. I think that's sort of uniquely a very microsoft Y thing to do, which is it's not just.
That tech we build.
It's how the tech we build allows others to build more tech.
That's I think who we are at our core DNA.
Did that guy have any idea he'd be running the place a chance?
I was like hoping to stay there in my job for the next month if I could, I was lucky enough to get hired. It was you know, you know, there was no you know, there was no notion that you know, I'll ever get to anything other than enjoy the job. But that's probably the thing that I never felt any job I was doing at Microsoft somehow was a path to the next job. The job I was doing was like the most exciting thing that I could be doing, and I gave it at all, and the rest is history.
You are credited with leading Microsoft's comeback, and you came in as kind of a wartime CEO.
Is it peacetime now or is it still war?
I mean those metaphors are interesting to me. I feel like the Microsoft I grew up in was that there was no such thing as oh wow, we want anything. All through the errors from ninety two on, we felt like, oh my god, the entire platform is shifting underneath us. We better do something otherwise. We were going to disappear,
right the web. I mean I would say maybe for a brief moment in client server we felt like, ohow, we got it, and then the web happened, and then we had to adjust to the web, and then mobile and cloud happened, and now of course AI is happening.
And so at least the core DNA and the core posture I've had throughout my thirty two years at Microsoft is we better, we better get our act together to make sure we're learning fast enough about what the next big thing is and then really be doing relevant things in it. So I would say, so I hate the wartime, peace time, but it's all about hey, are we being
relevant in the future. The only way to survive, I think in tech industry, which is pretty harsh, there is no such thing as franchise value, right, I mean, that's the hard part of it, and so you got to give it you hope you succeed, and you got to take lots of shots on goald.
Do you got to stay paranoid?
Yeah, it's kind of that. That's one way to think about it, or stay excited. Maybe that's another way, Like paranoia is one motivation, the other one is to say, wow, what got you in here? Forget the success for a second, and then more importantly, just have the curiosity and stay optimistic about the future.
Maybe that's the way to do it.
You obviously have a booming enterprise business when you look at what Google is doing in Apple and Meta and Amazon, how important is it to you to win in consumer AI and how do you do that?
That's a great question.
So to me, the Microsoft again that I've grown up with, we never actually thought of consumer and enterprise is two distinct things.
We sort of thought of the category.
Knowledge work or productivity, right, Like you know, we build tools that spanned consumer and enterprise. It's just that the consumer market has expanded a lot, or consumer tech market has expanded in many categories, and that's fantastic. But to me, I want us to play to our strength. Like if I look at even what we're doing with co pilot, right, how do we build a cop pilot that is the new browser effectively in this intelligence era that has a unique characteristic of.
That is Microsoft.
Right, whether it's you know, hey helping you with your travel planning or whether it's shopping or with your homework. But do it in a way that it uniquely telegraphs what I think Microsoft's signature would be in it, in what is going to be a new way to litigate what is the consumer market?
As we saw with search in your competition with Google, sometimes you just can't fight the verb. It's habit forming and chat GBT is the verb right now. So how much do you worry that Microsoft loses the mind share game?
First thing, I'm very thrilled about Chad Jepet's success. You know, as partners, as investors, as you know, we every day the chat jept succeeds is a fantastic day for micro.
Right every day you should every time you search on chat gpt, Microsoft makes money.
Yeah, and it's by the way, powered by being and so so to me, it's fantastic to see chat jepet success, and in some sense it really improves the point that you know, markets can evolve and new hit products can
be created from anywhere and what have you. And so that is what gives us even the unique opportunity with co pilot right, which is essentially to say in a world where a new category is being born, which is these new agents, these agents will have memory, will have personalization, Essentially, you can even think of it as the beginning of a new browser category. And there are lots of people
who are going to enter the browser categories. We all have unique strengths and angles of differentiation and distribution even and so time will tell. But I must say I'm thrilled that chat, GPT and Copilot are some of the leading products out there well.
And Microsoft is building its own models. Open ai is making other friends. And your partnership ends in twenty thirty Are you trying to tell the kids that maybe this marriage isn't forever?
See again, this is another thing I've learned in the last fifty years is you know, you approach all partnerships and create long term, stable partnerships which are win win, right. You know, we for decades are partnered with Intel. For a decade, we're partnered with SAP. That's at least the Microsoft I've grown up in. So I hope that for decades to come, Microsoft and open Ai will be partnered.
In a variety of different ways.
Will they have other partners absolutely, Will we have other partners absolutely? And so therefore I think we overstate all of these things as zero sum.
They don't necessarily need to be.
Microsoft wouldn't be here fifty years in as successful as we are if we had not learned and how to partner well in these long term stable constructs.
But the relationship is changing, right, Like, how is it changing and what happens when that deal is.
I think any company that has gone from being a research lab to one of the most successful product companies of this age, obviously things have to change for them and for us, and in the context of the partnership, right, So therefore I look at it. We're investors in open AI and we're thrilled about that. We are we have IP rights, We're thrilled about that access.
We are infrastructure providers.
They are the biggest customers of ours, and so to us, having that multifaceted sort of partnership is what we are really focused on. And I do think in their lives the long term stability of it, right, which is every day they're doing well, we're doing well, and if you're doing well, they're doing well. So why would any one of us want to go upset.
That so many companies are doing more with less. I've heard some tech companies are thinking, maybe we won't need to hire you and your engineers. If AI can do their jobs, you employ more than two hundred thousand people right now.
Is it half that in the future.
I think it's kind of interesting. So I think what we have to do is separate out that's broadly the knowledge work we do today and the knowledge worker. If you sort of say, well, there are two different things. Knowledge work will have a different level of abstraction and you will be able to then get more done.
That means the company can be more productive.
So to me, like, I'll give you an example of what we've done in terms of a structural change in LinkedIn. We have front end engineers, we have designers, we have product managers. So what you know the LinkedIn team has done is taken all of them and said they're full stack builders now. And so in some sense, what it's created is more capacity for that team to be able to conceive and you know, and deliver more products for
more customers than ever before. So I think I look at the iteam like one of the things about software engineering, right, you know, get Up I think is on course to maybe a couple of hundred million users and on course to a billion user dream. And so you say, well,
does the world need a billion software developers. Absolutely. I look at the IT backlogs everywhere and all the apps that need to be built, and so I think think, thanks to get up copilot first, more people can get in, more people can complete task how you build the applications. So this abundance will drive actually the you know, will fulfill the demand that is not being fulfilled today.
The emergence of deep Seek from China, you told your team to quickly integrate it into Azure. Open ai is saying it should be banned, it's stay controlled. Why don't you think it's a risk, and what do you think of China's role in this fight?
I think, first of all, there are two very different things, right. One is there's the model and then there is the application, and I think that both have to be part separately for different you know, and people should opine and states should take action based on what they see.
There is the The thing that I.
Think about is they will always be leading closed source model. Open ai is one such example. They've done fantastic work. Obviously we're excited about sort of how they continue to quite frankly set the standard right because even deep Seek's innovation is mostly a catch up to what open ai had already delivered with one and three, and so I think that's kind of one side of it. The other side of it is there will always be open source, and if anything, what deep Seak has proven is open
source can come from any place. In this case, it happens to come from China. The next model may come from some other country, it may come from the lab in the United States, it doesn't matter. But the rate of diffusion of this technology is such that in this industry we better sort of really face up to the fact that this is the rate of diffusion that's faster than anything before, and it's worldwide.
And the last big algorithmic.
Breakthrough or systems bake through or tech breakthrough has not happened yet.
Let's talk about that.
Because we're in this new computing era, tech giants including you, are spending trillions of dollars on building these AI data centers.
Do you have any.
Concerns about the size and scale of this bet like, are we building the future the right way?
I think the scale is pretty stunning, right in the sense of I thought I joined a software company and here we are talking about tens, if not hundreds of billions or dollars of Capex.
So what happened?
I think the interesting thing, in an interesting way is we've used capex to amplify the effects of software and make it ubiquitous. That's kind of really it, right, which is when you think about tokens, which is a way to deliver intelligence per dollarp a.
What that's the equation I obsess about.
Our ability to generate that abundance of tokens has increased tremendously, and that's the supply side of it. And that's what a lot of people talk about, whether it is on the chip side, or on the data center side, or.
On the power side. But the real test here, Emily, is what happens in the real economy. Right end of the day.
It will be very evident to us, what is the GDP growth rate? You know, in the developed world or in the global South. Are we growing faster because of this new input we have called intelligence, which is abundant.
Because when you have a new input whose prices effectively are falling by half every three months, six months, that's crazy, right, I mean this is so then you have to then translate that into health outcomes, education outcomes, small business productivity, public sector efficiency, large multinational competitiveness anywhere in the world,
and that then parlays itself into GDP growth. So to me, the real test is not some benchmark or what have you a AI, it's one simple fact, which is when we start seeing higher growth rates around the world, and the benefits of that growth rate, by the way being much more broader cross sectorally and by economic strata, then I think you'd have achieved something.
You've said, you won't be successful unless you're successor is successful.
What is Microsoft in fifty years?
You know, I'm mostly focused on what is Microsoft on the fifty first year? But I think you bring up a great point to me, and I think in any institution that succeeds, for a leader to have people who come after them who are most successful means that's probably the best testament to institutional strength that you may have built right, culturally, technologically, whatever it takes. But to me, that's I think a great way to measure even right.
It's not like, you know, I'm always suspect when somebody comes in and says I'm the savior because everything before me was bad and I'm going to save it.
First of all, I never believe that it's the case.
And also I think, if I've done anything right, hopefully the next CEO and the CEO after them can do even better than what Microsoft has achieved.
In the first fifty Microsoft changed the world? Will Microsoft change the world again?
To me, that's you know what is exciting about Microsoft, And in the coredina of this company, I go back to that, you know, that founding moment. And I don't know what the thought was really right when Bill said, you know what, the software industry didn't exist, right, remember, I mean, so he kind of and he and Paul sort of said, oh, we should build software and hopefully we can monetize it and they will be an industry.
I mean, it's crazy.
Hopefully they will come.
Yeah, and it all happened, and so that and but the the other thing about it, though, was that that core of what we want to build software so that others can create more software. That ability to think of us as an input to somebody else's output, whether it's knowledge work, whether it's software development, you pick your field. That I think is what is gives us relevance. And
I always say this, longevity is not a goal. Relevance is and The framing of this company from nineteen seventy five to twenty twenty five has been the same, which is, can you do things that allow others to do more things. That's a beautiful way to frame it because then you know that'll be true always.
If you could time travel to twenty seventy five, what advice would you give your.
Successor I mean, the advice I got from Steve Bama when I took on the job is the advice that I think of all the time, which is be bold because if you're not bold, you're not going to do anything. And be right because if you're not right, you won't amount too much. And so that ability to sort of get past the statusco by really boldly thinking of a future that doesn't exist, but then executing right at the end of the day. Business is about being able to
earn the stripes one step at a time. And I think that's what this company has exhibited, what it has taught me all through my career at Microsoft, which is you got.
A dream and execute, Dream and execute, and that you.
Know we're not gotten it always right, both either on the dream side or on the execution side, but on the batting average it's pretty good.
You've talked about diversity and inclusion as a bedrock of company culture.
You didn't go to the inauguration.
How important is diversity and inclusion still to you as you build the next fifty Yeah, I mean.
Just true for us.
When I think about our mission of empowering every person in every organization around the world to achieve more, you have to then take the prosecution of that mission as the most important thing. And to prosecute that mission, you need to make sure you have people who represent that world in the company. It's not like we're doing I never thought of what we thought of diversity and inclusion is somehow separate from running our business.
You know.
I always think about the social purpose of a corporation is to create profitable solutions to the challenges of people in planet. And that's you know, an Oxford economist said that not me, and I like that definition, and to me, the keywords are being both profit and solutions to challenges
of people in planet. So I think our mission is aligned with that social purpose, and in order to prosecute our mission, we just need to make sure that we have the people and the talent and the merit that all that talent represents and so we'll always have that approach.
Okay, so we're going to do a quick rapid fire and now I'm looking for like one to three word answers. Okay, Microsoft's biggest hit.
You know, Windows biggest miss, Clippy. It's just ahead of its time. It is just ahead of its time. It's back again.
Biggest surprise, The biggest surprise.
Was maybe maybe this open AI chat GPT right in my career and I look at it like when we launched it. Now, maybe maybe that's what was it, right, which is wow, that talking I mean like having a chat interface become a hit was a real surprise.
A CEO, you'd love to trade jobs with.
A CEO that I would trade with maybe the you know the.
Maybe the CEO of Fred Hutch.
Biggest future bet AI or Quantum.
Both in fact, In fact, I think of AI as the emulator for what is the simulator of nature? Right, So in some sense, Quantum's dream is to be the simulator of the nature, and AI helps us actually be the emulator for it.
The hardest lesson you've learned as CEO.
I think the hardest one is to be able to really live that, right, the deliver the present and then prepare for the future. That ability, Like, as a CEO, what is it that you have to do each quarter?
You have to create magic?
Right, that's kind of what every ninety days the market expects you to create magic, and that's kind of the reality of the world we live in while at the same time building.
A long term institution.
And so I think that that's I think, and the accountability that goes with it, even you know, I must say, even one step removed and not understood it as well as the last eleven years of being able to sort of understand what it takes to have that ultimate accountability to both deliver today and for tomorrow and to be able to get that balance right.
All right, Well, here's to tomorrow in the next fifty years. Thank you so much, as Satya, thank you so much. I appreciate it.
If you'd like to watch our deep dive into Microsoft on their fiftieth anniversary, check out the circuit on Bloomberg TV or the Bloomberg Originals channel on YouTube. You'll hear from all three CEOs, as well as Microsoft Vice chair and President Brad Smith and Microsoft AI CEO Mustafa Suliman. It's a big episode full of lots of great stuff, so definitely go watch it. This has been the Circuit podcast.
If you'd like to hear more extended interviews like this, please rate and review our show on Apple Podcasts or Spotify or wherever you get your podcasts, or you can always just share it with a friend. Our senior producer is Lauren Ellis, our writer and editor is Billy Disney, and I'm Emily Chang, your host and executive producer.
Thanks for listening.