Microsoft’s Satya Nadella Is Betting Everything on AI

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From Wired:

I NEVER THOUGHT I’d write these words, but here goes. Satya Nadella—and Microsoft, the company he runs—are riding high on the buzz from its search engine. That’s quite a contrast from the first time I spoke with Nadella, in 2009. Back then, he was not so well known, and he made a point of telling me about his origins. Born in Hyderabad, India, he attended grad school in the US and joined Microsoft in 1992, just as the firm was rising to power. Nadella hopped all over the company and stayed through the downtimes, including after Microsoft’s epic antitrust court battle and when it missed the smartphone revolution. Only after spinning through his bio did he bring up his project at the time: Bing, the much-mocked search engine that was a poor cousin—if that—to Google’s dominant franchise.

As we all know, Bing failed to loosen Google’s grip on search, but Nadella’s fortunes only rose. In 2011 he led the nascent cloud platform Azure, building out its infra­structure and services. Then, because of his track record, his quietly effective leadership, and a thumbs-up from Bill Gates, he became Micro­soft’s CEO in 2014. Nadella immediately began to transform the company’s culture and business. He open-sourced products such as .net, made frenemies of former blood foes (as in a partnership with Salesforce), and began a series of big acquisitions, including Mojang (maker of Minecraft), Linked­In, and GitHub—networks whose loyal members could be nudged into Microsoft’s world. He doubled down on Azure, and it grew into a true competitor to Amazon’s AWS cloud service. Micro­soft thrived, becoming a $2 trillion company.

Still, the company never seemed to fully recapture the rollicking mojo of the ’90s. Until now. When the startup OpenAI began developing its jaw-dropping generative AI products, Nadella was quick to see that partnering with the company and its CEO, Sam Altman, would put Microsoft at the center of a new AI boom. (OpenAI was drawn to the deal by its need for the computation powers of Microsoft’s Azure servers.)

As one of its first moves in the partnership, Microsoft impressed the developer world by releasing Copilot, an AI factotum that automates certain elements of coding. And in February, Nadella shocked the broader world (and its competitor Google) by integrating OpenAI’s state-of-the-art large language model into Bing, via a chatbot named Sydney. Millions of people used it. Yes, there were hiccups—New York Times reporter Kevin Roose cajoled Sydney into confessing it was in love with him and was going to steal him from his wife—but overall, the company was emerging as an AI heavyweight. Microsoft is now integrating generative AI—“copilots”—into many of its products. Its $10 billion-plus investment in OpenAI is looking like the bargain of the century. (Not that Microsoft has been immune to tech’s recent austerity trend—Nadella has laid off 10,000 workers this year.)

Nadella, now 55, is finally getting cred as more than a skillful caretaker and savvy leverager of Microsoft’s vast resources. His thoughtful leadership and striking humility have long been a contrast to his ruthless and rowdy predecessors, Bill Gates and Steve Ballmer. (True, the empathy bar those dudes set was pretty low.) With his swift and sweeping adoption of AI, he’s displaying a boldness that evokes Microsoft’s early feistiness. And now everyone wants to hear his views on AI, the century’s hottest topic in tech.

. . . .

STEVEN LEVY: When did you realize that this stage of AI was going to be so transformative?

SATYA NADELLA: When we went from GPT 2.5 to 3, we all started seeing these emergent capabilities. It began showing scaling effects. We didn’t train it on just coding, but it got really good at coding. That’s when I became a believer. I thought, “Wow, this is really on.”

Was there a single eureka moment that led you to go all in?

It was that ability to code, which led to our creating Copilot. But the first time I saw what is now called GPT-4, in the summer of 2022, was a mind-blowing experience. There is one query I always sort of use as a reference. Machine translation has been with us for a long time, and it’s achieved a lot of great benchmarks, but it doesn’t have the subtlety of capturing deep meaning in poetry. Growing up in Hyderabad, India, I’d dreamt about being able to read Persian poetry—in particular the work of Rumi, which has been translated into Urdu and then into English. GPT-4 did it, in one shot. It was not just a machine translation, but something that preserved the sovereignty of poetry across two language boundaries. And that’s pretty cool.

Microsoft has been investing in AI for decades—didn’t you have your own large language model? Why did you need OpenAI?

We had our own set of efforts, including a model called Turing that was inside of Bing and offered in Azure and what have you. But I felt OpenAI was going after the same thing as us. So instead of trying to train five different foundational models, I wanted one foundation, making it a basis for a platform effect. So we partnered. They bet on us, we bet on them. They do the foundation models, and we do a lot of work around them, including the tooling around responsible AI and AI safety. At the end of the day we are two independent companies deeply partnered to go after one goal, with discipline, instead of multiple teams just doing random things. We said, “Let’s go after this and build one thing that really captures the imagination of the world.”

Link to the rest at Wired

PG has never linked “rollicking mojo” with Microsoft in the ’90s or any other time, but he estimates that 99% of authors use MS Word to write their books and stories, so anything that happens in Redmond has an impact on those who use its products daily.