 Good afternoon, ladies and gentlemen. It's for me a particular great pleasure to Continue what we did already in the past to have a dialogue with Satya Nadella Who I don't have to introduce him Probably is a highly as a most regarded and respected leader in industry and chairman and CEO of Microsoft so I'm Just when should you have a question or a comment, please stand up and mention your name but let me let me start with a discussion with Usatya and it seems when we look at the force industry revolution So now in technological development when you look at the S-curve We are really at the point where we have the exponential development. We see it Just look at the announcements over the last weeks Artificial intelligence quantum computing and I could go on and on now Satya you you are at the forefront of those technological developments in many ways and What do you see what major shifts will come out of this of those developments? and I mean, what would be the final result of all those dynamics? No, first for class. It's fantastic to be back here and have this conversation and I think you described it well, which is Where are we on the S-curve? and Interestingly enough I sort of think about it as there's one S-curve where we are at the tip Where it's now about? deployment confusion Mainstream in fact one of the things I think a lot about is in a time like this where let's just say with all of the macroeconomic Challenges or take even inflation. I think it's short time for us even in the tech industry To really say okay How can software for example be a deflationary force so that every business can do more with less? So there's one side of it, which is real deployment of technology so that we can use the most Reasonable resource we have in order to tame some of the inflationary forces a good example to just give you one is you know, there's a You know take what unilever is done with their lights out manufacturing with digital twins It was great during the pandemic as a way to do Manufacturing well remotely, but more importantly in Silico they're able to simulate and reduce energy cost water wastage and other wastage So therefore that's a good example of doing more with less. So that's one side. The other side is Something like artificial intelligence. If you look at it, it's at the beginning of her new S-curve And that's the fun fun part of being in the tech industry where there are certain technologies that are reaching maturity that need to get deployed and show real results and then we now have essentially Emergence of a completely new set of technology, which I think is going to be a revolutionary You say it will be a revolution I think we all feel it will be a revolution, but there is a certain fear particularly about artificial intelligence People feel it this humanizes us and so on now What what steps do we need actually to make sure that so is Technologies particularly artificial intelligence remains society oriented and human centered. Yeah I mean, I think it's a great point and I think a very important consideration and quite frankly a design consideration. In fact, one of the Things we think a lot about is how to deploy this technology To empower human beings to do more. So for example, like on New Year's Day I saw this tweet by Andrij Karpati who was an ex founder of the autopilot group at Tesla who's in you know an AI developer and So he sort of referenced perhaps the biggest product that made a difference in his life in the last 12 months Was the GitHub co-pilot we had launched last year. So so here's a software developer Using tools and saying now GitHub co-pilot is generating 80% of his code So it's that doesn't mean Andrij is not writing New code and being at his creative best It just so happens that now he has 80% leverage in doing what he's doing. He's still the pilot He does have a co-pilot. So that's why I even like the branding of what we did there Because I think it helps put the pilot in charge and the co-pilot helping the pilot But that's one example. I'll give you another anecdote, which for me perhaps was the most Revealing of what the can happen. I was in India at the beginning of January And I saw this demo class in India one of the things that's very exceptional That's happening is digital public goods that are getting built for identity payment many systems and one of the digital public goods That's getting built is for language translation So the basic they have an open-source project so that anybody building any application in India can translate between any language in Indian Any Indian language. So a demo I saw was a rural Indian farmer Trying to access some government program, right? So he just expressed a complex thought In speech in one of the local languages that got translated and interpreted by a bot and a Response came back saying go to a portal and here is how you lax as the program He said look, I'm not going to go to the portal I want you to do this for me and it completed it and the reason why it was able to complete it was because it they had that a developer building it had taken GPT and Trained it over all of the government of India documents and then scaffolded it with this speech recognition software So think about what that meant right that basically meant that a large model a Foundational model that was developed in the west coast to the United States a few months before had made its way to a developer in India who then Sort of added value to it to make a difference in a remote villagers life And I've never seen that type of diffusion to your point about the industrial revolution clouds You know, I would say you know, we're still waiting for the industrial revolution to reach some large parts of the world 250 years after The internet maybe took 30 years Maybe the cloud and mobile took 15 years and now I think we're talking months which to me I Think is perhaps the benefit doesn't mean to your core question We shouldn't take something like AI safety. Yeah as a core Consideration right, you know at the design time and so therefore even when we launched these APIs which we did this week One of the key things is the APIs have safety built into it for harmful content or the context in which they use So a lot of work needs to go into it still but we think of both the unintended Consequences and the benefits both being something that we harness. So you feel that GPT and similar technology Will become very fast Penetrating our lives business lives, but also personal lives. Yeah, I I I think about You know, we all remember in 2007 2008 the birth sort of that was the last time I would say we had major platforms being born by the mobile platform And the cloud platform and you know in the last 15 years. They've gone mainstream You know, we're still out say, you know still in the throws of its penetration, but it's Significantly understood that this technology is making a real difference I think that the AI piece in this particular generation of AI Is showing that type of I would say platform shift and just to kind of give you an intuition clouds the As to what exactly happened like why are we talking about AI in January of 23 after all we were talking about it last year But there seems to be even I had not expected if you had asked me last month coming to F Would I be talking about AI this much? But it turns out that you know, even the chat GPT moment as I think captured people's imagination But we started the work with open AI. I would say three and a half years ago When we started building the AI supercomputer in Azure to train these large models So in fact that the workload of this particular form of AI requires a complete rethink even in the system architecture of the Computing infrastructure and we did that hard work and train these models And when you look at GPT 3 to 3 5 to what's coming these are non-linear developments So they're showing emergent capability and I'm not saying this is the last model architecture Innovation there'll be more to come but the fact is that these things by themselves are becoming Platforms that I think truly can make a difference. Let's see. Yeah, we say we see audience. I raise a question Who of you has Made already his own personal experience with GPT Yeah It shows the sophistication Of the audience now there's another technology which we demonstrate here and we actually do it in Corporation in partnership with Microsoft and with Accenture But we have 70 80 companies in a consortium Behind it or behind us. It's a global collaboration village Which is the first probably the first metaverse application for public good What are your thoughts about it? Satya first of all, I think the vision you've had clouds around You're using this new technology of Metaverse and these immersive experiences to bring the world together To both have that sense of community presence And collaboration. I think it's just absolutely needed, right? I mean if I think about what is special about Davos It's about the ability for multiple stakeholders to come convene Learn debate come out of it with energy on what they can do to change the world And so to some degree to say that if there's some new technology that can for example Really bring this global collaboration village to life where not only can people collaborate when they're here But it can be an ongoing thing. I think it's fantastic. So I think if I would encourage everyone to go see the exhibits Because I feel the thing that is most for me Game changing about this particular technology is that sense of presence one has right which is When you're even virtually Interacting I think during the pandemic all of us obviously did a lot of video meetings And I think it is definitely got us through the pandemic And I think they're going to be very much part of our lives And I think of this as a very natural extension of it because beyond video meetings If you can have more immersive experiences where that presence the co-presence can be felt you can understand the impact of Any of these the hard topics that we're talking about I think that can be pretty game-changing So I think it's a brilliant idea. I'm glad to be partnered with you on it And I would really encourage everyone to participate. Let me let me just see who has participated at the demonstration So who haven't I think have still an opportunity To do so but um, let me come back Satya to an issue which we discussed also last time It's uh cyber security we discussed it every year and it seems that it gets every year worse And um, it's undermining actually is a trust into the digital system Um, so what can we do? We have any chance to enhance Trust into our digital infrastructure. Yeah, it's uh I think you said it well because in some sense as digital technology gets um much more You know pervasive in our sort of economy and in our life The unfortunate consequence of it is also cyber crime and And cyber security issues are on the rise. In fact, I think there was a great panel Today from what I understand on some critical infrastructure And in fact if you look at what microsoft has done in the case of ukraine or albania, these are all well recorded At this point in terms of the work we had to do to protect essentially critical infrastructure And even nation states that are under threat But to your point interesting enough you phrased it right, which is in order For us to have trust And security You have to have an approach which is zero trust Which is kind of the paradox in fact the the way The the security community talks about the best way for you to have Security is to assume breach And then think about your defense If you will and so therefore we have had microsoft developed an end-to-end infrastructure Whether it's from identity to the endpoint security to application security to uh the Infrastructure security with the zero trust architecture But not only that we are you know, we see trillions of signals right because at the end of the day It's an intelligence game. And so we are taking the Intelligence slash signals we have and using it actively right the only reason why we were able to intervene in the ukrainian situation Was because we saw the signals Long before even the attacks and therefore we were able to then help evacuate essentially the ukrainian Government into the cloud and so those are the kinds of proactive action that we have to take I think in order to protect so the operational security posture of every organization every nation every public You know critical infrastructure institution is going to be very very important But how do you explain that most of the companies are not yet on the level? They should be and what can be done in order to increase to make it Let's say a general rule like everybody today probably closes The door In the evening. What can we do? Yeah, I mean one of the things Which we always advise is you know you use the cloud So for example the place one of the ways to be secure is not to be fighting this alone Because at some level you want to be able to get leverage if if you go back to what I said This is a signals game. You want to have the signal strength on your side versus being isolated So that's one of the reasons why I think it's going to be very important for us, especially around local government public infrastructure To be able to modernize the infrastructure and have it run in what is environments that are really well suited to fight the cyber criminal activity I may change to a certain extent the nature of our discussion come back to an issue which of course is very much In our minds this week here in in Davos. It's the energy Sustainability and energy transformation And you are one of the pioneering companies because you want to be by 20 certain not only carbon neutral But carbon negative by 2050 to yeah, which means to to Take up the sins in the past and to correct some now Um What what would be your advice to us the companies and what can microsoft? What can what can the technology like your technology do in order to help other companies to achieve? To go faster in energy transfer in energy security and energy. Yeah So I mean first I would say you know, we're doing a lot first to make sure our house in order because um Given the commitments we have made Each year we audit them and we making sure that we are making progress on it and quite frankly In the last year for example, I think on scope one and scope two We did a good job reduced our emissions by 17 percent Where a scope three increased because of the increased usage of the cloud and our gaming consoles and a lot of those Uh, they increased by close to 20 percent. So we have our work cut out. In fact, I was very very pleased even this year Early on to see the work that we put into xbox in order to reduce its energy footprint When at rest. So therefore, I think there's a lot of work. We're doing ourselves quite frankly Like after all, you know, all those ai supercomputers consume a lot of energy And so one of the key things is that everything from the data center design to the power draw Of the chassis in which these gpus are act. Uh, I think the cooling systems This is sort of innovation agenda. That's front and center for us um The second thing though to your point clouds, which is one of the places where I think we can make a real difference And we're working hard and we have you know launched something called The cloud for sustainability Uh, is around carbon accounting, right? So one of the it's somebody described it to me It's like we're trying to deploy an erp system at the same time as the gap rules are being created And so you need an approach even, uh to how one does carbon accounting That is more flexible and keeps up with all the data that's coming in. And so we produce we have a software system with many partners We now want every small business. For example, I'm here like in europe I think every bank now is going to look at even the carbon footprint of companies before giving credit And so in order to enable that and enable the fluency of that I think we want I can do a lot of work and one other thing I'd also mentioned going back to some of the ai pieces and even sort of you mentioned quantum I think the core at least my layman's Understanding of even the energy transition challenges We want to take 250 years of chemistry And compress it into 25 years And if that is going to be possible or one of the ways that is going to be possible is with computing power and especially Computational chemistry and so we're doing a lot of work in Whether it's ai techniques or even quantum inspired algorithms even being run on classical To help with I would say computational chemistry and the discovery of new molecules that can perhaps accelerate This energy transition. I want to take you up on the world quantum. I come back to the Forced us revolution for some people quantum is still something in the future for some it's already reality Where do you stand in terms of you know, we we've had a research program in quantum In fact in the last year There have been some real breakthroughs because we've had a an approach to quantum where we are trying to not just achieve quantum supremacy But you know to be able to build a general purpose quantum computer You need to have sufficient number of Stable qubits and so the approach we have taken is that approach where can we build a general purpose quantum computer? And you know, we have sort of published results on some of the breakthroughs in the last year So I do think it's still, you know Ways away. It's not here today, but I think the interesting thing is the software stack That needs to be built for quantum is getting built actively. In fact, if anything the entire The fact that you can simulate Quantum algorithms on classical is one place where we can in fact already start benefiting But let's face it. I mean, there's you know, lots of things that are happening that are rapidly moving whether it's about On the encryption side or how do you in the post quantum world protect yourself? And so these are all fields that are actively both being researched as well as being deployed If we look at economic growth in the last 10 years or so it has been very much driven by companies like yours and There was a kind of tech boom and now lately we have seen the news about layoffs and Does it mean that the existing business model on which tech industry was based is coming to an end And has to be replaced by a new model. Yeah, I mean, I would say there are two things right one is I look at it in two ways. One is the overall economic growth in the world Because at the end of the day all of us are governed by What is happening in the world inflation adjusted in terms of economic growth? So because no one can sort of defy gravity And the gravity here is inflation adjusted economic growth And I would say all up in the world the inflation adjusted economic growth has been pretty weak And one of the things that I'm optimistic is digital technology Can help boost it things like artificial intelligence can help boost it That said in the tech industry we grow multiple times gdp And so the question is during the pandemic there was rapid acceleration I think we are going to go through a phase today where there is going to be some amount of normalization of that demand Quite frankly we in the tech industry will also have to get efficient right It's not about everyone else doing more with less. We will have to do more with less So we will have to show our own productivity gains with our own sort of technology And then coming out of this cycle though class I do believe that as a percentage of gdp tech spend by definition will increase And not because it should just increase it will increase by because of its contribution to the all up gdp growth So that's sort of how I view. I think what's happening in our industry our business model challenges But more importantly what I think are the economic challenges in the world But Satya I would go maybe even one step further and would say The next phase must comprise much more the application of Social technologies in areas where it is not yet applied and I'm not thinking only of Developing countries. I'm thinking of Education I'm thinking of agriculture if you look Just all at those two areas. They are very old-fashioned. So this is a large, let's say Opportunity for those technologies to penetrate much better. It's the overall economy. Would you? Absolutely. It's a very important observation because in some sense what you're pointing out is also economic growth is not just economic growth It's got to be equitable economic growth that is spread by geography by sector By segment. It's not about just large businesses But it's about large and small businesses is about public sector Institutions and that I think is the crux of it right. I think in this next phase of globalization even I think when we talk about economic growth, we'll have to think about it At the core like what's the equity of that economic growth and how is it being spread? Just to go even one step further if you if you go into this direction I mean the talent question becomes key. Now you have attracted So talents the best talents and silicon valley in seattle Um, isn't there a lack of talents? Let's take agriculture to translate the potential into reality. It's a you know, so first of all, let's face it. I mean there is There's a real issue around skills re-skilling And talent I I'm very hopeful that some of these new technologies are going to be helpful in that process What I mean by that is You know, I give you already that example of andridge karpathi and him using github co-pilot and as an elite ai developer getting assistance from a co-pilot But the same thing is true for a first line worker using say one of our tools like power platform To be able to use a natural language prompt to do some workflow automation So think about this. This is someone who is in the front line who has domain expertise But doesn't have it skills Is able to now do it tasks That's one way for us to in some sense bridge the talent cap So I think that you're pointing in fact even the rebalancing of even software engineering talent In fact, if you think about it, then it was actually two years ago that the number of software engineers that are being hired Outside of what is considered the tech industry is higher than in the tech industry So that means going forward we will have more of the digital skills spread Much more evenly across the economy and that's a good thing right because we need that we need them in agriculture We need them in banking. We need them in health care. We need them in education We we spoke about the global collaboration village and um I mentioned we have 80 companies behind and we have a permanent exchange of ideas and one one, let's say Conviction came out That the metaverse will be a tremendous We can provide us with new capabilities, particularly in education Would you agree 100% because in some sense if you look at There too. In fact, if you sort of combine the two technologies that I think people are talking about take metaverse and take AI If you put these two things together, what does that mean? Like it means that you can now help People learn with other people together collaborate across space and time and most importantly Something like a co-pilot being there to help even diagnose the conceptual mistakes a student is making right when they make it Uh and then help them Overcome that I think so I think I think this notion of collaboration And learning together is where I think we can make a real leap forward I I think uh one of the reasons why Let's say this is animal meeting as a success Is not only working together, but it's the serendipity effect But if you do it in the virtual world in in let's say again in the global collaboration village You can build in the serendipity with artificial intelligence into the system So you know exactly who is the best in order to help you to solve your own problem? That's right. That's right. In fact one of the my favorite features even in One of the in the products we've recently built is whenever you want to research a topic It doesn't just tell you the answer to the topic, but it tells you the people That you should connect to it then that ability to know Whom to talk to to learn more As something that is I think as as important as learning more And you can build it in that's right Now I really running out of time that I would like to come back to one question which we also touched upon last time It is the future of work And there's a lot of discussion about remote work and I think you and your company has been very Let's say engaged into discussions about this issue. What is your learning from those discussions and What are your recommendations? I think that the the key observation that make is we're still learning because You know, there's been real structural change I don't think we can just say we'll go back to 2019 nor can we say we're going to live like is as if it is 2020 Uh, if you will so therefore there is real New patterns of work emerging there are three trends that we are observing class Which I think are in you know to me at least are guiding even our own set of decisions So the first is there is what I'll characterize as this productivity paranoia, right? Which is every leader thinks that somehow they're not being productive But there is everybody who's working in the organization feels burnt out So there is that debate As to who is true and what is the truth? And so therefore I would say less more data less dogma will be a good way to sort of End that debate and in other words at the end of the day organizations have to be productive There's no question the outcomes matter and the question is instead of being dogmatic about the way to achieve the outcome We should sort of focus on the outcome and then rediscover Perhaps new patterns of successful work. So that's one the second thing I would say Is we're also learning that people come for other people not because somebody set policies Uh, so people don't come for policy, but people will come for people And if you buy that then I think we all have to even learn many new soft skills, right? Convening, you know calling a meeting versus convening an event two different things Um, you know because you set like when you convene an event you set so much more context you You market it you help people have a successful event Whereas meetings sometimes you go in unprepared you don't worry about what the consequences of that are and what have you So I think we all have to learn be much more deliberate learn a lot of soft skills So that people to people connections are really forming because that's I think very important for social capital the last thing I'd even say Is it will be very important for us not to take for granted that the people who work in our organization Are all connected to the company's mission or the organization's mission and so re recruiting training In fact one data point we observed Is unless and until people feel fulfilled in their jobs in terms of new skills that they're acquired They're not going to have loyalty to the organization So us really investing in their progress inside of the job in the sense of accomplishment I think are going to be important so tools and technologies are there But I would say new management practice and sensibility is perhaps what we will all have to develop In this context you're just used to about Loyalty, how would you describe loyalty of an employee towards my cousin? No, look, I think at the end of the day. I always say The most important thing is for people to sort of think of who are working at Microsoft is the one Is they should think of Microsoft as a platform To be able to connect with our mission to achieve what's core to them Uh, I think that's the social equation. Uh, I think the loyalties only exist if Microsoft as a platform is helping them achieve what they want to achieve It's not a it's it's it's sort of not a Something that we take for granted. It's something that we have to earn as an organization by giving people a platform So you have to build an attractor Absolutely, and also give them a reason why they think of Microsoft Thank you so much. I may I may uh, just Close I think we are already over time, but one short Question I I met so many leaders and you may have seen in the agenda I wrote a small article what how I defined leadership and I said leadership is a combination of Soul brain heart muscles and nerves So soul standing for purpose So brain standing for professionalism So heart standing for passion And the muscles for Implementation capability And good nerves you need today, and I think we just have seen a leader who combines all those five dimensions So, thank you very much