Microsoft CEO Satya Nadella says he’s confident that artificial intelligence will not hit bubble territory based on what he’s seeing behind the scenes.
In a new interview with Mathias Döpfner, Nadella lays out the single test he believes will determine whether AI is real or overhyped.
“The test is it does need to have a broad impact across the economy in shifting the productivity curve and leading to GDP growth that is [widespread]. Because at the end of the day, nothing can outrun economic growth. Because any supply-side thing will have to ultimately meet a demand-side thing. And so in time, things have to work. Otherwise…it will be a bubble.”
Nadella believes that AI now has the capabilities to supercharge America’s economy. He notes that the only thing stopping the tech from making a massive economic impact is adoption.
“But that said, the reason why we have confidence is not because of some future that we imagine. It is because this is where I think it is always the case in tech, which is that the future is already here, except it is not evenly distributed. And so that is sort of the asymmetry.”
He also describes how fast AI tools are improving, citing personal examples of reasoning performance that broadened his conviction.
“I see the speed with which Copilot is kind of improving in its reasoning capabilities… Even in response to an email, and it is not like, ‘Oh, I hit a button, and it just said or came up with some English language response.’ It really reasoned on the question. It felt like a thought partner was working with me to ask precision questions of the person who had sent me an email. That is magical. That is the type of stuff that can speed up everything.”
Nadella also cites Microsoft’s own financial results as proof that AI’s impact is already material.
“And by the way, even our revenue, like if you look at it, when we did our last quarterly results, the fact that we showed 40% growth in Azure, that is real numbers today and at a large base.”
While Nadella is confident about the future of AI, he warns that the industry will not go up in a straight line.
“The skill set needs to be much more ubiquitous. It cannot be few companies in one sector in one continent having all the returns. It has to be a much broader phenomenon. Otherwise, it will be a quote unquote, a road to nowhere. But I feel pretty confident that we are on a path to this. But at the same time, it will not be linear like nothing is.”
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