Satya Nadella excited for AGI, but puts human utility first and pushes back on the ‘one-model-for-all’ idea

Is AGI the biggest thing after the industrial revolution?

Though Nadella does not entirely dismiss that AI could be as important as the industrial revolution, he somehow leans more towards the premise, adding a qualifier that we are still early. “I start with the excitement that I also feel for the idea that maybe after the Industrial Revolution this is the biggest thing. I start with that premise.”

“At the same time, I’m a little grounded in the fact that this is still early innings. We’ve built some very useful things, we’re seeing some great properties, and these scaling laws seem to be working. I’m optimistic that they’ll continue to work,” Nadella said. 

Nadella asserts that AI has the potential to be transformative, but he acknowledges that we are still in the early stages, perhaps even in the first or second innings.

During the conversation, Nadella also shared that his favourite definition of AI came from computer scientist Raj Reddy, which he claimed was very human-centric. “He had this metaphor for AI: it should either be a guardian angel or a cognitive amplifier. I love that. It’s a simple way to think about what this is.”

Will we get AGI?

For the Microsoft chief, the key question is not ‘will we get AGI’ but ‘what is its human utility?’. “Ultimately, what is its human utility? It is going to be a cognitive amplifier and a guardian angel. If I view it that way, I view it as a tool,” he said. 

He also acknowledged that people may even go ‘mystical’ about AI, meaning they may say that it is a tool that does things that only humans did before so far. However, he also added that this has been the case with many technologies in the past.

During the conversation, the interviewers pushed for a common AGI vision, such as a single model that gets deployed everywhere, continuously learning, and doing almost every job in the economy. 

When asked if that happens, will it let the leading model company capture almost all the value? Nadella responded, saying, “If there’s literally one dominant model, deployed everywhere, ingesting all the data and continuously learning, then yes: that’s game, set, match. You’d basically stop shop.” 

However, he also believes that is not how things are playing out actually. “For all the dominance of any one model, that is not the case. Take coding; there are multiple models. In fact, every day it’s less the case. There is not one model that is getting deployed broadly.”

Nadella feels that constraints by domain, geography, and use case will prevent one single ‘god model’ from owning everything. “Is it going to happen in all domains? I don’t think so. Is it going to happen in all geos? I don’t think so. Is it going to happen in all segments? I don’t think so. It’ll happen in all categories at the same time? I don’t think so.”

The CEO asserts that “design space” is too big for a single winner.

Where does AGI’s value go?

When asked who gets the margins in an AGI world, the model companies or the ‘scaffolding companies’ that build tools, platforms and workflows around these models, Nadella said that both would matter and models alone are vulnerable to commoditisation. 

He also went on to suggest that model companies may even face a ‘winner’s curse’. “You may have done all the hard work, done unbelievable innovation, except it’s one copy away from being commoditised. Then the person who has the data for grounding and context engineering… can then go take that checkpoint and train it.”

His answer to who wins in all these is that there will be powerful open-source models, multiple frontier models, and the real advantage would be combining models with data, tools, and workflows. 

Meanwhile, the Microsoft CEO also thinks that the future would not be simply about humans and chat UI. He hopes for a world with autonomous agents working across a company’s infrastructure.