Satya Nadella is, once again, altering the trajectory of AI
The OpenAI story still seems to have plenty of room to change. But we shouldn't be surprised that Microsoft's grand dealmaker got Sam Altman in the door.
About ten years ago, Microsoft was desperately trying to remain relevant.
Apple had ushered in a “bring-your-own-device” era where employees were—with a company’s blessing or not—using their iPhones at work. And Google was pushing deep into companies with enterprise-grade versions of Google Drive and Gmail. Microsoft, meanwhile, remained addicted to its classic Windows strategy under its then-CEO Steve Ballmer.
Fast forward to today, and it seems that Microsoft CEO Satya Nadella has secured a deal to get former OpenAI CEO Sam Altman and president Greg Brockman to lead a new AI group at the company. With OpenAI’s bungled firing of Altman and its inability to come to a deal to get them back in the door, Nadella may have pulled off one of the greatest industry-altering moves of the decade.
The Verge is reporting it’s still not a done deal. But even if the pair do not end up joining Microsoft to run a new research division, it shows the talent Nadella has for applying pressure at just the right angle to get a deal done. Nadella may have succeeded in bringing Altman and Brockman in, or succeeded in forcing the OpenAI board to act in Altman’s favor.
Indeed, that’s the refrain from all the sources I’ve spoken with in the last day. Or as it effectively boils down to the following: Satya is a “genius.”
The outpouring of support for Altman makes it enormously clear he could be both Microsoft’s effective operators and recruiters as it pushes to own AI. It’s both to Microsoft’s benefit and continues to generate more turbulence for OpenAI. As of the time this lands in inboxes, OpenAI employees were agitating for the removal of the board—including board member Ilya Sutskever.
But, really, should we be surprised that Nadella was able to pull this off?
I would say not, as he has shown time and again to be one of tech’s best operators and dealmakers of the last decade. From his ascent to CEO through the chaos of OpenAI’s meltdown, Nadella has served as an extremely potent voice to gather more power and influence under Microsoft. During his reign, the tenor and reputation of Microsoft has completely changed and flipped back to an innovator on the level of Apple and Google.
And throughout the chaotic process of Altman’s firing, Nadella has clearly served as the most powerful voice in the process trying to get the ship pointed in the right direction.
It’s hard to point to any one industry-altering homegrown technical innovation in the last decade outside of its push to get Office into the cloud at Microsoft. Much of Azure’s growth has been to bring it to industry parity and build out effective sales motions. You could argue that its Windows updates and Surface line of devices are important, but not to the level that it completely alters the strategies of competitors.
Many in the industry I talk to do credit Microsoft for forcing the costs of storage down through competition with AWS to the point that it’s mostly irrelevant how much data larger companies store within the cloud.
But Nadella has also overseen acquisitions of some of the most important companies of the last decade on top of securing its massive—and peculiar—partnership and investment with OpenAI. The latter made Microsoft’s ambitions clear in AI and immediately put Google and Amazon on the defensive.
And with each move and acquisition Nadella—and Microsoft—seemed to beat the odds. Microsoft was treading water under former CEO Steve Ballmer. In October, it closed a $69 billion deal for Activision-Blizzard after 21 months of managing scrutiny from multiple regulatory agencies to become one of the largest game publishers and console makers in the world.
The industry, already evolving at a blistering pace, seems poised to tilt in Microsoft’s direction even further. Should Sam and Brockman actually end up leading a team at Microsoft, they will inevitably bring with them the A-team of researchers and developers that are ready and willing to push the envelope of AI.
Nadella and his team have emerged as this decade’s most savvy deal makers, time and again winning out in these industry-altering moves. And it began almost immediately after the company named him CEO a little less than ten years ago.
Satya Nadella’s ascent as Microsoft’s dealmaker and operator
Microsoft selected Nadella, its then-head of cloud services, to run the company in February 2014. Other candidates at the time included COO Kevin Turner, operating systems lead Terry Myerson, devices and studios lead Julie Larson-Green, Tony Bates in its business development unit, and its applications and services lead Qi Lu.
Just two years earlier the pick seemed even clearer. Steve Sinofsky—the architect behind Microsoft’s grand mea culpa operating system Windows 8—was seen as the potential heir apparent. He then left the company in November 2012. Ballmer, who indicated he wanted to stick around until retirement, ended up retiring well before that when he handed the reigns to Nadella.