Interview with Satya Nadella

Emerging from the bustling stage of Microsoft Build, Satya Nadella sat down with Rowan Cheung to peel back the layers of a rapidly evolving digital world. Their conversation wasn't just about new tech, but a deeper dive into how AI agents are fundamentally reshaping the web, the future of work, and even the very fabric of enterprise strategy. Nadella offered a candid, thoughtful perspective on the monumental shifts underway, focusing less on hype and more on tangible impact.

Building the Agentic Web: A New Scaffolding for AI

Nadella opened by describing the current moment as a crucial platform shift, moving beyond individual applications to a generalized, scalable approach for developers. He emphasized the vision of an "agentic web," where multiple AI agents orchestrate complex tasks, pulling data from disparate sources to deliver powerful, real-world solutions. He cited the Stanford Medicine demo – using AI to enhance high-stakes tumor board meetings by integrating data from pathology, multiple labs, and PubMed – as a prime example. The goal is a truly open, composable stack where every layer adheres to standards and protocols, culminating in an experience where "technology is powerful enough to disappear."

Microsoft's strategy, according to Nadella, involves building a "scaffolding for the AI age." This isn't just about one UI; it's about creating diverse "UIs for AI" tailored to different users and workflows. Whether it's the M365 Copilot integrating chat, search, and agents for knowledge workers, or GitHub Copilot for developers, the underlying capability is the true innovation: powerful reasoning models orchestrating multiple data sources and models to fulfill complex intents.

Key Insights:

• The "agentic web" enables orchestration of multiple AI agents to solve complex, real-world problems.
• Microsoft is building an open, composable AI stack from Copilot to Foundry, fostering true openness.
• The concept of a "UI for AI" is not singular but diverse, offering tailored interfaces for different user needs and workflows.

Redefining Knowledge Work: From Typist to Agent Manager

The rapid pace of change inevitably brings questions about job displacement, particularly for knowledge workers. Nadella addressed this by drawing a parallel to the evolution of work: if an alien intelligence observed work in the early 80s versus today, it might see humanity as one giant "typist pool" – yet we're doing more complex knowledge work than ever. The key, he argued, is abstraction and the empowered management of AI tools.

He offered a personal anecdote: preparing for a customer visit in 1992 involved multiple manual reports and emails. Today, thanks to reasoning models, he simply prompts an AI to "Pull all the stuff I need to know," which then gathers information from the web, emails, documents, CRM, and supply chain systems, delivering a comprehensive report. "The workflow is inverted," Nadella explained, "I am more employable today because I feel more empowered." His advice for knowledge workers is clear: "use the tools, change the work." Acknowledging that displacement will occur, he stressed that "the best defense against that is skilling reskilling. And it starts by using tools versus, not using them."

Key Changes:

• Workflows are inverting, with AI abstracting repetitive tasks and empowering individuals.
• Knowledge workers are transitioning from task executors to "agent managers."
• Empowerment through AI tools makes individuals more "employable" by enhancing their capabilities.

The Future of Code and Enterprise Advantage

The interview also delved into the profound impact of AI on software development, with Nadella noting that Microsoft is already seeing 30% of new code shared with AI. He speculated on a future where 90% or 95% of all code is AI-generated, framing this not as a threat, but as a solution to a global "tech debt" problem – the vast number of unfinished software projects worldwide. AI tools, from intelligent code completions to multi-file editing agents, help developers stay in flow and tackle this deficit. Importantly, Nadella reiterated that "ultimately the human is in the loop. I think we overstate the autonomy here." AI agents propose changes, but human review remains crucial.

For enterprises, the true advantage in this new era lies in Copilot fine-tuning. This allows companies to leverage their unique knowledge and proprietary data to tune AI systems, creating a virtuous cycle. As Nadella articulated, "The sustainable advantage is to get a new sample to then use these reasoning models with your data to then be able to do RL in the real world." This feedback loop, where market signals reinforce the application of internal knowledge, becomes the "new theory of the firm."

Key Practices:

• Embrace AI to address "tech debt" and accelerate software development, rather than fearing job displacement.
• Utilize AI agents for tasks like code completion, explanation, and multi-file edits, keeping humans in the loop for review.
• Leverage proprietary data for Copilot fine-tuning to establish a sustainable competitive advantage and reinforce learning from market signals.

Culture, Reinvention, and the Disappearing Technology

Microsoft, having navigated multiple tech transformations from Novell to the cloud, understands the continuous need for reinvention. Nadella highlighted the immense challenge of simultaneously changing "how we work, what we work on, and how we go to market." This requires a robust culture and ongoing capability building, enabling companies to "take more shots on goal." He cautioned against relying on case studies: "The reality is, case studies don't help. You have to do it yourself." Like going to the gym, fitness comes from personal effort, not just observation.

Addressing personalized education, Nadella drew a parallel to the diffusion of PCs and Excel in the workplace. People didn't learn Excel from classes; they learned by using the tool to solve immediate problems in their workflows. He shared an anecdote of a Microsoft engineer who, overwhelmed by manual fiber-optic network DevOps, built a multi-agent orchestrator using low-code tools. This empowerment, he argued, is key to upskilling across the organization. This vision culminates in "proactive agents," where technology interprets high-level intent and executes tasks with minimal friction, ideally "disappearing" into the background, yet always with a session log for human inspection and control.

Key Learnings:

• Sustained success in tech shifts requires simultaneous reinvention of work culture, product focus, and go-to-market strategies.
• Companies must cultivate a culture of continuous capability building and "doing the hard yards" themselves rather than just observing others.
• Upskilling is best achieved through the "diffusion of general purpose tools" and empowering employees to solve their own workflow problems, much like the adoption of PCs and Excel.

Beyond Benchmarks: Celebrating Impact, Not Just Tech Companies

The conversation concluded with Nadella addressing his viral comment about AGI being "nonsensical benchmark hacking." His point was not to dismiss AI research, but to pivot the conversation from abstract benchmarks to tangible societal impact. He emphasized the need for technology to "make a damn difference," citing healthcare as a prime example, where 19-20% of US GDP is spent, much of it on inefficiency. He dreams of a future where multi-agent orchestrators like the Stanford demo become ubiquitous, allowing providers to deliver better, lower-cost care.

Nadella expressed a deep desire to shift societal focus: "I think we as a society celebrate tech companies far too much versus the impact of technology." He yearns for a day when the users of technology – those in healthcare, education, or any other industry – are celebrated for doing "something magical for all of us," rather than the tech industry celebrating itself.

"I just want to get to a place where we are talking about the technology being used and when the rest of the industry across the globe is being celebrated because they use technology to do something magical for all of us, that would be the day." - Satya Nadella