Microsoft makes software for humans doing work. Office and 365 generate ~$100B in revenue/year. I asked Satya Nadella, what will happen to Microsoft as we move towards a world where AIs, not humans, are doing all the knowledge work? An interesting back and forth.

@satyanadella Meanwhile, Dwarkesh with his beard:

@satyanadella Everything gangsta until AI agents realise its better to use Google Drive

@satyanadella Dwarkesh mogging everyone with his SOTA beard

"hat will happen to Microsoft as we move towards..." What? There won't be any Microsoft by then. MICROHARD! You think this is a joke? Classic... The verdict is in, it's only a matter of time 🤭 This guy, with his hands tied, won a war against the biggest government in the world while simultaneously building an xAI that outperformed all its competitors! And caught a falling rocket the size of the Titanic. All at once year... But he can't handle these old nerds? Yeah, sounds logical 👍

Have to disagree with Satya here. When the human is removed (or minimized) from the equation, then AI doesn't need as much "infrastructure overhead". A lot of the software is just compensation for human limitations. Agentic AI is by definition (and premise) the method to overcome human limitations and therefore is deflationary.

@satyanadella My guess is Satya’s betting on infra, since no one knows whether agent-to-agent workflows will rely on human-readable docs or structured sheets. But as long as humans stay in the middle, those formats aren’t going anywhere.

@satyanadella Microsoft’s cash cows are built around humans doing knowledge work. The AI shift could force them to rethink not just products, but the very definition of “work” their tools support.

@satyanadella Who remembers the AI Excel startup Sam funded? Why would you do that when MSFT is obviously bringing AI to Excel with the OpenAI IP? Sam knew. Was he just turning his party friends into millionaires? One is a DJ.

@satyanadella It wasn't that interesting, nothing substantive was said. It's all just conjecture.

@satyanadella Using the Agents as workers metaphor, there is a real possibility that the Agent becomes smart enough to where it can do all of the Excel work "in its head" and doesn't need that tool

@satyanadella That back and forth showed why infrastructure strategy is harder than people think. He doesn't pretend to know if OpenAI wins, if agents become fully autonomous, or if scaffolding beats models. Position for optionality across multiple futures. Systems thinking at scale.

@satyanadella @grok explain this conversation in simple words

@satyanadella Per-seat licensing breaks when agents do the work. Question becomes whether Microsoft sells to humans managing AI or becomes the infrastructure layer agents run on.

@satyanadella We are building the Office for AI Agents to do work. @grupa_ai is the next Microsoft but for AI Workers.

@satyanadella Today's productivity software will be invaluable as a flexible user-agent interface -- you can co-design a slide deck in PowerPoint or a Spreadsheet in Excel, for example. However, fully agentic workflows will not require any such software beyond simple code compiling. Risky bet.

@satyanadella Ai agents don’t need any ui.. and they just render the ui/results on the fly as the user wants to see them

@satyanadella You guys keep begging to get Satya on your shows so you can throw him a bunch of softball questions. Try asking him why Microsoft is so intent on shoving AI down people's throats and forcing implementation?

@satyanadella If AIs do the work, Microsoft becomes the operating system those AIs run on.

@satyanadella Seeking knowledge is the ultimate goal of humans, if you are offshoring it AI there is no point in human existence!!!

@satyanadella Companies aren't happy about expensive Microsoft licensing. This $100B revenue growth won't be growing forever. If @google decides to offer a real private mode online business office suite for businesses then Microsoft will lose millions of customers @ericschmidt

@satyanadella can you tell your partner to talk less, bro just keeps going on and on and on, instead of asking the question, Satya had to interrupt him otherwise he wouldn't have stopped.

@satyanadella I know it's not the same thing, but I always wondered why they didn't like buy GPT for Sheets or do that early 2023

@satyanadella The $100B revenue model isn't built on the tools anymore. It's built on two things Microsoft already owns: 1. The entire 'data corpus' the AIs train on. 2. The 'attention economy' of the human who edits the AI output.

@satyanadella Traditional proprietary applications will be replaced by more flexible agents , if you have data in a accessible format , agent with intelligence can process it as per protocol of usage

@satyanadella Why is this guy even famous? Need 101.

@satyanadella You are growing a sick beard Dwarkesh!

@satyanadella The comment from @satyanadella about Borland was insane.... what if they drop a SOTA model next year.... maybe put the EU back on the AI map

@satyanadella Friend bought a zephyrs 16 and used windows after long time for playing some games, holy hell what a bloated piece of shit software is that. 3000$ laptop with no software installed just randomly hangs, setting options so much bloated hard to find what to do. GKH i used in past.

@satyanadella All this an copilot is still terrible for Microsoft

@satyanadella Nice thoughtful exchange

@satyanadella Why do AI need to use microsoft infa or softwares? Can't it just create a sort of internal software to process some requests. I mean AI will obv be capable of doing that. @grok what's your take on this?

@satyanadella He does not seem to know what he is talking about. He probably does not yet understand the full potential of AI. Soon, he will probably be replaced too.

@satyanadella There seems to be a disconnect on timeframe between Satya and Dwarkesh: Dwarkesh is inquiring about the end state, while Satya is responding to the intermediate timeframe. Satya is looking at the next 5–10 years, while Dwarkesh is asking about the next 10–50 years.

@satyanadella If AI agents bootstrap off Office tools like Excel, whats the per agent pricing model look like to keep revenue steady?

@satyanadella