Microsoft CEO Satya Nadella spoke at the 56th World Economic Forum in Davos, outlining how artificial intelligence is transforming software, productivity, and knowledge-based work. Nadella said generative AI is creating new opportunities across industries by automating tasks, increasing efficiency, and unlocking economic surplus.
He highlighted how AI tools are already reshaping coding, financial analysis, and decision-making, while emphasizing that technology should continue to empower human agency rather than replace it. Nadella pointed to real-world applications driving productivity gains and accelerating innovation across the global economy.
The remarks come as business leaders and policymakers debate the future of artificial intelligence, regulation, and its impact on jobs and growth at the annual Davos summit.
00:00Think about it. The way I come at this is not that this has always been the arc of computation,
00:08right? You can sort of take it in the last 30 years or the last 70 years. It's always been about
00:14can you digitize artifacts about people, places, and things, and then build analytical and
00:24predictive power, right? That's what the mainframes did. That's what the mini computer did.
00:29That's what the client server error did. That's what the web error did. The mobile cloud error
00:34did. So it depends, irrespective of which paradigm or platform, it has been one continuous arc
00:43of saying, let's make better sense of this world by reasoning about it in digital form.
00:53Because in some sense, once you have these artifacts in digital form, you can use a more
00:59malleable resource like software, which doesn't have the same type of, I'll call it marginal cost
01:09economics associated with it, that allows us to then build more insight and more capability.
01:16And in that context, AI, I would say is of the same class, at least, like the web or the internet, or mobile or PC
01:25or the cloud, or maybe even greater. And so to me, right now, where we are is, you know, let's take just
01:34what's happened with software engineering, right, which is one, you know, is knowledge work. You know, you could say it's elite knowledge work. It started off, you know, in fact, my own belief in this generation
01:48generation of AI and its capability, really got built up when I first saw GitHub co-pilot do code completions, right. So for the longest time, we had the dream that if you're a software developer, can you predict the next sort of word or the next line of code. And suddenly, it started working with these models. Then you said, Okay, if I can do that,
02:10then can I actually go and bring back, you know, the flow for a software developer by going to a chat session and asking any question, it comes back with answers that then you can use in your coding flow, right. So that was the next thing. Then you said, Well, if that's working, can I assign it small tasks, that was the agent mode. Now you have complete autonomous agents where you can give it your entire project, right, it can work, you know, 24 seven, it can work for 24 seven, I mean, it's still we've got
02:40some ways to go for these things to remain coherent long time, but nevertheless, it's getting better and better. And interestingly enough, you look at it, the software developer still is got a lot of agency in it, right. So that's why I kind of still think that you're going and thinking of these as somehow living outside of the realm of human agency is probably not the right way to think about it. In fact, the way to perhaps conceive it, like if let's say in early 80s, if somebody had come to us and said,
03:10four billion people are going to wake up every morning and start typing, you would have said why, right, you know, we have a like, we have a typist pool, that's good enough, we don't need 4 billion people. But we that's what happened, like we invented this entire class of thing called knowledge work, where people started really using computers to go amplify what we were trying to achieve using software.
03:36software. I think in the context of AI, the same thing is going to happen. It's not like, you know, what is hardcore coding is going to remain hardcore coding forever. It's just that the levels of abstraction are going to change. But we also are going to have code as output, just like documents. In fact, one of Bill's things at Microsoft from the day I joined in 92, always was what's the real difference between a document, a website and an application, right?
04:04It's the lack of sort of software that can transform itself. Interestingly enough, AI finally gives us that, right, which is I can write a document, I can just say no, I don't want it as a document, I want it as a website, it'll just transform that document using code into a website.
04:20I say, well, I don't like the website, I want an app, it'll write more code to transform it. So that reasoning and keep reasoning capabilities that prediction capabilities that ability to take action remain long term coherent is all improving. And our job though, is to parlay this like take even what you at BlackRock are doing, right? When you're taking something like say co pilot plus Aladdin and bringing those things together, right?
04:49To improve the productivity in the firm for the decisions you want to make, right? With your data.
04:56I could just tell you from our firm, things that would take 12 hours to compute now takes minutes. For us processing 14 trillion dollars of other people's money with hundreds of thousands of different mandates.
05:10We could do that instantaneous. To me, if it wasn't for the technology and AI today, we would not be able to function to the scale that we're operating.
05:19That's right. And so to me, that one firm at a time, one country at a time, if we can really take these tokens and bend the curve of productivity, then there is surplus everywhere. And that's really the goal.
05:33Well, surplus could be scary too. Does the surplus mean fewer workers? What do we mean by surplus? And so, you know, I'm going to tie that into my second question about AI diffusion.
05:44Yeah. To me, the whole realization of AI for any society and also for a more balanced world is making sure that it's.
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