AI labs like OpenAI aim to create "artificial general intelligence," general-purpose AI systems that will take over much of cognitive work. Microsoft CEO Satya Nadella calls for real growth, not benchmark hype.
In a recent podcast appearance, Microsoft CEO Satya Nadella took aim at the current fascination with "artificial general intelligence" (AGI). He dismissed self-proclaimed AGI milestones as "nonsensical benchmark hacking" and called for a more grounded approach to measuring AI progress.
Nadella points to current economic indicators as evidence that AI hasn't yet transformed the economy. While developed countries see about two percent growth, the real rate after inflation sits near zero. He argues that true AI-driven progress would need to generate growth rates of five to ten percent, similar to what we saw during the industrial revolution.
Nadella thinks that tech companies won't be the biggest winners in a potential AI transformation. Instead, he believes the real beneficiaries will be mainstream industries that integrate AI as a "commodity" to boost their productivity. "When that happens, we'll be fine as an industry," Nadella said. His outlook aligns with Microsoft's interests, as Azure cloud growth depends heavily on widespread AI adoption across industries.
Microsoft and OpenAI reportedly have an agreement that defines AGI as AI systems that outperform humans at most commercially valuable work while generating maximum profits for early investors. According to their deal, AGI achievement is tied to reaching $100 billion in profits.
Nadella is happy to lease all those H100s in 2027
Nadella expects the global race for AI computing power to create an oversupply in coming years, as both companies and countries rapidly build capacity. While Microsoft continues to expand its data centers, Nadella says they're doing so within limits.
He cautions against simply building computing capacity and hoping demand will follow. The technology needs to deliver real value to customers, he argues, and supply and demand must eventually find balance.
Looking ahead to 2027/2028, Nadella appears eager to lease tons of cheap H100s, anticipating falling prices due to this expected oversupply. "I am thrilled that I'm going to be leasing a lot of capacity in '27, '28 because I look at the builds, and I'm saying, 'This is fantastic.' The only thing that's going to happen with all the compute builds is the prices are going to come down," Nadella said.
Human cognitive work won't go away
Nadella dismisses fears about AI eliminating cognitive work entirely. Instead, he sees a transformation: while AI may automate existing cognitive tasks, it also creates opportunities for more sophisticated work. He uses email as an example - rather than sorting messages, people could focus on analyzing the most important ones.
Nadella believes humans and advanced AI systems can coexist without diminishing human cognitive capabilities. However, our understanding of cognitive work will continue to evolve.
