Home » ET Interview | AI will not only solve challenges for India but also for the world: Satya Nadella

ET Interview | AI will not only solve challenges for India but also for the world: Satya Nadella

Artificial intelligence will not only help solve India’s unique structural challenges and help increase productivity and societal benefits, but those solutions for India may turn out to be relevant for the rest of the world as well, Satya Nadella told ET during his annual visit to the country last week. In an interview, the 56-year-old chairman and CEO of Microsoft Corporation called AI the new factor of productivity and said it will aid India’s goal of being a $5-trillion economy. Edited excerpts:

Congratulations on completing ten years at Microsoft. You’re being talked about as the ‘GOAT’ of tech CEOs, the greatest of all time. Your success is partly due to the fact that you placed the right things at the heart of Microsoft 10 years ago, in terms of mobile, cloud, and so on. So, what is going to be Microsoft’s paradigm ten years from now?

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The way that I characterise my time at Microsoft is to look at it as this 32-year run. There have been four massive platform shifts, whether it’s the PC client server, web internet, mobile cloud, and now AI (artificial intelligence). I go back in time then, and pattern match on what it means to be here too. What happened in the year minus two or minus three is the most important thing. You have to make these leaps on what comes next long before it’s conventional wisdom.

For example, our Open AI partnership, our ability to go long on them, and build the compute infrastructure… It is obvious now, but it was not obvious even three-four years ago. That’s the learning. When you’re in year two of the next thing, you should be already thinking about what is next.

Essentially, we are a compute company. The world 10-20 years from now will need more of it. This is where the quantum effort fits in. That is why we’re doing leading research work on what is the next model architecture. Before any of this becomes obvious, we have to be on it. Or how are we building the next generation of the data centre system?

If data centres are the new computers, they’re going to look very different, given all that’s happening with these AI accelerators. What we’re doing in terms of the user interface, how can we reimagine what is the embodied side of all of this AI? Whether it’s autonomous, whether it’s robotics, whether it is mixed reality…is important. We were, after all, leading with HoloLens. And now I think we get to rethink it in terms of MR (mixed reality) and AI coming together. So, we are making concrete investments in these things today, so that we can sow the seeds of what comes next.

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Also read | ET Interview | AI to speed up India’s growth on road to 2047: Microsoft CEO Satya NadellaYour 10 years at Microsoft has coincided with the rise of India globally both in terms of its stature economically as well as geopolitically. From your prism, what are the challenges that India needs to overcome to be really a developed nation?

I’ve been influenced heavily by Diego Comin’s work on how technology diffuses and how do countries get ahead? And his observation, having done the best longitudinal study of the industrial revolution, was that two things need to happen. One is you need to make sure that new technology, especially a general-purpose technology, is adopted wholesale – i.e., don’t reinvent the wheel, bring it in, and then intensely use it to create new value. What’s happening right now in India is exciting to me.

Not only is the Indian market very buoyant, but its growth is the best in the world. The rate of diffusion of something new like AI, and the fact that in a year’s time, it’s more diffused makes me hopeful of the future. When I look at Sarvam AI out of India, or I see Bhashini and Jugalbandi in the public sector, or when I see Air India, ITC, etc, and what they’re doing with farmers gives me a tremendous amount of optimism about India’s ability to continue its economic growth profile. The IT sector in India has become early adopters at scale for something like a Copilot because, after all, they’re not only going to be doing work in India, but they’re going to be showing the rest of the world how to use all of these AI technologies. At the end of the day, what’s the difference between being a developed country and a developing country? It is just the rate of growth over long periods of time.

And you feel AI would accelerate that rate of growth?

I absolutely do think so. Fundamentally, I think that if the Indian economy is going to be a $5 trillion economy, the question is, what is the amount of that economic growth that’s going to be driven by a new factor of production? So, therefore, I kind of feel that AI – it’ll show up…(and help) more productivity in the energy, retail or healthcare sectors. It’s not about the tech sector’s growth. It’s about the tech sector’s ability to impact growth across sectors.

Are you seeing Indian enterprises take to AI with creativity and imagination? Is there a lot of activity happening there, or is that slow?

Not at all. In fact, that’s what is exciting. India has its own structural unique challenges, but can the solutions to those structural challenges translate into even very new innovative competitive solutions? That’s why I always go back to that combination between digital public goods, which is pretty unique in India, then scaffold that, daisy chain that, with say something like a large language model, to create a service for someone who is participating in the labour force. Or, in the rural economy, improve crop productivity, or make it easier for a rural immigrant to be able to find housing. That’s creating societal benefit, driving productivity, getting the benefits of AI more broadly spread, and that’ll be a unique solution that’s going to be very relevant for the rest of the world as well. India and its unique ability to use this technology to create solutions for its own structural challenges are going to be a competitive advantage.

How would you say the macroeconomic situation is right now? Are we out of the woods yet?

There is real economic growth in countries like India. But there’s also high inflation around the world and the interest rates are what they are. What happens in terms of the US economy and whether that is soft landing (we don’t know). But there’s no going back the last 15 years… If anything, there’s a real dialogue in every business, in every country – about using resources well, most productively. That’s why even when it comes to something like cloud, there’s both optimisation happening while investments in the new are also happening. I think that’s a healthy mix. The tech sector cannot be immune to what is happening in the rest of the world. I always say Microsoft will do well if the rest of the world is doing well. And so, our job number one is to make sure we are contributing to the rest of the world’s economic growth. And if that happens, we will be fine long term. In the short term, business cycles are a real phenomenon, and you have to be able to be disciplined enough to weather business cycles and that’s what every business is trying to do.

How do you react to the characterisation by at least one Wall Street analyst of you as the greatest or most effective tech CEO of all time?

What I’ve always felt as a leader of an organisation like Microsoft is you have to really stay focused on two major things. One is to stay grounded on what’s that sense of purpose and mission, because there’s no God-given right for any organisation just to exist. They only exist if they’re really serving the social purpose in the broader society and the broader economy. Then the second thing, of course, is what’s the internal culture that enables us to do all of this. And so, the job of the CEO is to create that culture. So, as long as I stay grounded, and Microsoft stays collectively grounded on those two things – of being the learn-it-all culture, being grounded in a mission that we do well when the world around us does well – I am very optimistic about Microsoft continuing to have a bright future.