# Microsoft Chairman & CEO: AI, chip shortage, empathy, and poetry

- **Show:** In Good Company with Nicolai Tangen
- **Published:** 13 Mar 2024
- **Source:** https://shows.acast.com/in-good-company-with-nicolai-tangen/episodes/microsoft-ceo-ai-chip-shortage-empathy-and-poetry
- **Transcript:** https://podcasts.opennash.com/shows/in-good-company-with-nicolai-tangen/microsoft-chairman-ceo-ai-chip-shortage-empathy-and-poetry-391126/
- **Provider:** OpenNash Podcasts (machine-generated)

## In brief

Satya Nadella argues that nothing in technology carries lasting franchise value, so Microsoft must reinvent itself on each platform shift. He sees AI as a general purpose technology whose real payoff lies in the roughly 95% of the economy outside tech spending, such as healthcare, materials and energy.

The central tension is between confidence and humility. Nadella says Microsoft backed OpenAI as a real shot in the dark while rivals like Google hold big advantages, and he credits a growth mindset and empathy for the company's culture change. He frames empathy as a driver of innovation and execution, not a soft skill.

## Key insights

1. **AI's value lies outside the tech sector** Nadella notes tech spend is about 4-5% of GDP, so the real test is whether AI lifts the other 95%. He compares it to Britain spending 10% of GDP on railroads, which transformed the whole economy.
2. **Microsoft bets on a full AI stack** Nadella lays out layers from Azure infrastructure (with Nvidia, AMD and its own chips) to the data tier to Copilots. He says each layer should stay competitive, even with third parties competing against Microsoft.
3. **Microsoft's OpenAI bet was uncertain at the time** Nadella says backing OpenAI was a shot in the dark made before AI was conventional wisdom. He argues the partnership adds competition against Google, the vertically integrated default winner.
4. **Small countries should build on existing models** Citing economist Diego Comin's research on technology diffusion, Nadella advises countries like Norway to import the best general purpose technology and fine-tune it, rather than repeat costly pre-training.
5. **Empathy is treated as an innovation engine** Nadella says innovation means meeting unmet, unarticulated customer needs, which requires walking in people's shoes. He calls design thinking applied empathy and sees no conflict with accountable execution.

## Questions this episode answers

### Why does Satya Nadella say there is no franchise value in tech?

Nadella says that even past wins and losses are up for grabs again with each new platform shift, so a company must keep reinventing itself to stay relevant. He finds that both nerve-wracking and exciting.

### How does Microsoft plan to compete in AI?

Nadella describes a full-stack approach: top AI infrastructure on Azure, a redone data layer, and Copilot products for work such as coding, sales and finance. He says Microsoft will partner with Nvidia, AMD and OpenAI while keeping each layer open to competition.

### What is the 'growth mindset' Nadella uses at Microsoft?

It comes from psychologist Carol Dweck's work and means being a 'learn it all' rather than a 'know it all'. Nadella says learners eventually surpass know-it-alls, and he presents it as personally useful to employees rather than corporate dogma.

### Should a small country like Norway build its own AI model?

Nadella says it should start from the value it can add, and first use and fine-tune existing foundation models, for example for Norwegian. He cites economist Diego Comin's research that countries do best by importing the leading technology and building on it.

### How does Nadella think AI and quantum computing connect?

He says quantum computing could finally simulate molecules and cells, while AI acts like an emulator of that simulator by narrowing the search space. He cites a Microsoft AI-designed battery material that cut lithium content by 70%.

## Facts

- **Satya Nadella** [0:03:40]: "in the height of the industrial revolution, uh, in the United Kingdom, they spent 10% of their G D P building the railroads."
- **Satya Nadella** [0:02:25]: "if you think at a G D P level, uh, tech spend, narrowly defined, is probably four, 5%."
- **Satya Nadella** [0:04:17]: "when they were working even on the Dota two contest and what have you"
- **Satya Nadella** [0:04:57]: "Intel and Windows came together and and that was successful, S A P and SQL Server, so it came together and it was successful."
- **Satya Nadella** [0:08:23]: "my entire confidence in this generation of A I started when I started seeing from G P T three to 3.5 and that implementation in GitHub."
- **Satya Nadella** [0:06:41]: "we'll partner with Nvidia, we'll partner with A M D, we'll have our own silicon, uh, we will have our own system architecture."
- **Satya Nadella** [0:06:41]: "serving the needs of Phi that we are building, right? Which is the small language model."
- **Satya Nadella** [0:10:00]: "the first time I saw Mosaic, uh, you know, was, uh, as a browser on top of Windows"
- **Satya Nadella** [0:12:59]: "there's an economist out of Dartmouth, his name is Diego Coman, and he did one of the best longitudinal studies, uh, of technology diffusion."
- **Satya Nadella** [0:17:41]: "We worked with the Pacific National Lab locally here to effectively go reduce the uh, then the lithium content, uh, by 70% in a new battery material"
- **Satya Nadella** [0:18:12]: "we have our software stack with, uh, you know, our, uh, Q sharp, uh, which is our quantum programming stack."
- **Satya Nadella** [0:18:28]: "flight simulator, I think, was launched long before Windows was launched."
- **Satya Nadella** [0:19:18]: "D X, which was the Microsoft graphics stack, is what made G P U's, uh, an accelerator"
- **Satya Nadella** [0:20:09]: "Civ was my favorite game. Age of Empires is another great game that I enjoyed."
- **Satya Nadella** [0:21:40]: "I was lucky enough to have read, uh, Carol Dweck's book on mindset, which is around child psychology, called growth mindset."
- **Satya Nadella** [0:27:07]: "my son was born with cerebral palsy. He passed away a few years ago."
- **Satya Nadella** [0:29:21]: "I like this Colin Mayer definition that you have to create profitable solution to challenges of people and planet"
- **Satya Nadella** [0:33:48]: "he had this note, you know, his diaries were full of that schema, uh, which is, uh, people met, uh, ideas generated and tasks completed"
- **Satya Nadella** [0:34:26]: "my mom was a a professor of Sanskrit drama"
- **Satya Nadella** [0:34:56]: "I got into Urdu poetry in a big way in my mid-thirties, and so, uh, I grew up in Hyderabad"
- **Satya Nadella** [0:18:28]: "now with Activision as part of Microsoft, we have mobile gaming, we have cloud gaming, we have, uh, console gaming, P C gaming."

## Transcript

**[0:00:01] Nicolai Tangen:** Hi there, I've just had the most incredible experience of my life, having been allowed to interview Satya Nadella, the CEO of Microsoft, which is now the most valuable company in the world. Wow. Satya, you are the CEO of the most valuable company in the world. What's what's on your mind these days?

**[0:00:29] Satya Nadella:** Look, uh, to me, uh, Nicolai, first of all, it's great to be with you and, um, have this conversation. What's top of mind for me is twofold, right? One is I'm grounded in the fact that in our business, in tech business, now this is my thirty second year at Microsoft. Um, I know that for a fact that there's no such thing as a franchise value. And so that means every day you have to get up and hopefully you're doing things that are gonna be relevant tomorrow.

**[0:00:57] Satya Nadella:** Um, and so to me, that's sort of perhaps the biggest lesson learned over all these decades and years. And so here we are on what is essentially a complete new platform shift, uh, that we're in the midst of, right? I kind of say it's my thirty second year, but it's year two of my fourth platform shift. And so what's on mind is, like, okay, what is this platform shift really all about? And, uh, as a company, can we be all in and innovate, right?

**[0:01:25] Satya Nadella:** I mean, at the end of the day, uh, when I say there's no franchise value, it also means that you get to play for it all up again. Even the battles we won and the battles we lost are all up for grab again. And so therefore, um, there's a freshness to it. So what's on my mind is, you know, that ability to ground myself back yet on another platform shift, and it's exciting.

**[0:01:50] Nicolai Tangen:** The fact that there is no, uh, franchise value, does that make you nervous?

**[0:01:54] Satya Nadella:** Absolutely. I mean, it should make every one of us nervous, right? At least that's why the tech is so exciting, right? It's sort of, uh, it's kind of like the two sides to the same coin, right? One is you're nervous and it's exciting, so therefore you can't rest. Uh, but at the same time, hey, who wants to be in in a business that, you know, you where you don't get to reinvent yourself again and again?

**[0:02:16] Nicolai Tangen:** Absolutely. Do you think we look at tech in too narrow a sense? I mean, how can technology really be a driver for the next level of economic growth?

**[0:02:25] Satya Nadella:** Now, that's a great, great question. I think a lot about that, right? Which is, uh, in some sense, if you think at a G D P level, uh, tech spend, narrowly defined, is probably four, 5%. Uh, so the question is, what is happening with the other 95%? So one of the ways I've always thought about the prospects of any new technological paradigm or platform shift, like, take A I, let I if A I is going to be the next big general purpose technology, for me, the real opportunity is, let's say, tech spend goes from five to 10% over the next, you know, five years or what have you, or ten years.

**[0:03:09] Satya Nadella:** Then what happens to the other 90%? And the pie does it become bigger, right? Does the, you know, do we have a breakthrough in healthcare driven by A I? Do we have a a breakthrough in material science and energy transition because of, uh, A I? Uh, and the list goes on, right? So to me, that is fundamentally the way I think about it, right? Which is, I I think that one of the things that might be most important for us is to consider how a general purpose technology.

**[0:03:40] Satya Nadella:** Somebody was telling me this, right? Which is, in the height of the industrial revolution, uh, in the United Kingdom, they spent 10% of their G D P building the railroads. And obviously, the railroads not just didn't is not about the railroads, it was about the entire economy of the United Kingdom. And so something like that, I think, is what, uh, that's the unit of analysis, at least for me, as to how tech and its future will impact the, you know, broader society and economy.

**[0:04:08] Nicolai Tangen:** Now, Google had pretty much all the top A I people, and certainly you got ahead of them, partly due to your relationship with Open A I. How did that whole thing come about?

**[0:04:17] Satya Nadella:** I mean, um, to me, the way I came at this, uh, Nicolai, is just very simple, which is obviously we've been like, I think the very first thing Microsoft Research did in 1995, when it was formed, was some stuff around speech, right? In fact, I think we hired a bunch of the folks from C M U, and so we've been at this A I thing in its variety of different forms forever. Um, and so one of the things that when I met with the Open A I folks and Sam and Greg and crew, uh, back in, you know, I would say when they were working even on the Dota two contest and what have you, uh, was to

**[0:04:57] Satya Nadella:** sort of say, wow, they have a new different approach to things and we want a partner. I mean, you know, one of the things that I've always looked at over my years at Microsoft is look for high ambition, um, technology innovation companies, right? Whether it, you know, a and partnerships like whether it's Intel and Windows came together and and that was successful, S A P and SQL Server, so it came together and it was successful. So I'm always looking for partners that we can innovate with, and that's what I found in, uh, Sam and team and, uh, and we, you know, at that time it was not like it was a it was a real, uh, shot in the dark,

**[0:05:35] Satya Nadella:** right? It is not like, oh, wow, this is a sure, sure thing. Everybody now talks about it as if, uh, you know, this is the issue with tech, right? Which is, uh, long before its conventional wisdom, you have to be all in and hope it works, um, and this is one of those things where we backed it long before it was conventional wisdom, um, and here we are. But I don't take, you know, like, there's gonna be severe amount of competition, you know, Google's a very competent company and obviously they have, uh, both the talent and the compute and they have, you know, they're the vertically integrated player in this, right?

**[0:06:09] Satya Nadella:** They have everything from data to silicon to models to, uh, products and distribution, and there's others as well. And so, yeah, we will have significant amount of competition. And I think, if anything, Microsoft's partnership with Open A I is bringing more competition to otherwise what would have been a default, Google should be the default winner. Uh, and if we partner well and we innovate well, we can bring some competition to them.

**[0:06:36] Nicolai Tangen:** So, if you look, uh, three to five years from now, where is Microsoft in this whole A I ecosystem, you think?

**[0:06:41] Satya Nadella:** So, to me, I think about this in the fullness of the stack, right? So I want us to have, first and foremost, the best A I infrastructure. Uh, so that means when it comes to Azure, whether it's for training, whether it's for inference, to have fantastic infrastructure, we'll partner with Nvidia, we'll partner with A M D, we'll have our own silicon, uh, we will have our own system architecture. We will take the best system architecture innovation from Jensen and Lisa and others who may come along and make sure Azure is serving the needs of Open A I, serving the needs of Mistral, uh, serving the needs of Phi that we are building, right?

**[0:07:23] Satya Nadella:** Which is the small language model. So that's kind of the first, uh, thing that we want to do, which is the best work, um, in being able to build the infrastructure out for both training and inference. And then the next layer up, we want to have, like, the entire data tier, right? So you can imagine, as these models and model capabilities become, uh, you know, more capable, I think the data tier will be completely, uh, redone, uh, right?

**[0:07:51] Satya Nadella:** We've talked about the re retrieval augmented generation already. You have all these things where whether it's embeddings, vector search, how do you chunk data such that retrieval augmented generation can work well. So that's an entire layer. Or when context lengths become bigger, that's a different sort of data layer. Like, what's the throughput between data and your inference fleet? Uh, how do you sort of think about that? So therefore, we will innovate on the data layer. And then, of course, on top of it is where, um, we will innovate on our, uh, co-pilots.

**[0:08:23] Satya Nadella:** One of the first products we built was GitHub copilot. In fact, my entire confidence in this generation of A I started when I started seeing from G P T three to 3.5 and that implementation in GitHub. Uh, and so we now have, you know, not only GitHub copilot, we have copilot for my all knowledge work in Microsoft three, six, five, we have co-pilots for these functions, whether it's service or sales or finance. Uh, so we're going to innovate in our app layer, uh, on our own.

**[0:08:49] Satya Nadella:** And so that's, I think, fundamentally how I look at it. It's it's a full stack approach. Uh, and each layer, by the way, we're we will innovate, we will have partners, we will have others innovating, there will be competition even. It's not like, you know, one of the things of being a platform company is you've got to be comfortable, uh, with many third parties competing with you on different layers. Because, uh, that to me is core.

**[0:09:12] Satya Nadella:** Otherwise, you kind of try to, you know, do everything in a monolithic way. And at least what we've learned over the years is the best thing to do is to keep each layer competitive on its own.

**[0:09:22] Nicolai Tangen:** You said in the beginning that we are year two into this, uh, paradigm shift, uh, how do you see it compared to other technological breakthroughs that we that you've been through?

**[0:09:32] Satya Nadella:** So, at least the four I've seen, Nicolai is, uh, I obviously P C, client server, both what happened on the, you know, P C and the server side. That was my first. That's kind of when I joined ninety two. We're at the beginning of that. Uh, then there was the web internet, uh, and then there was mobile cloud, and so A I is the fourth. Um, I think one of the interesting things is each one of these built on the previous, right?

**[0:10:00] Satya Nadella:** So I don't think the web would have happened if there was not a ubiquitous P C. After all, the first time I saw Mosaic, uh, you know, was, uh, as a browser on top of Windows, right? So, and then Netscape came about and then, uh, I E and what have you. And so therefore, I think, um, you sort of see each one of these births, the next, uh, and then it goes beyond, uh, what births you, right?

**[0:10:26] Satya Nadella:** That's, I think, the the real thing, right? And right now we're seeing that, right, which is the cloud, um, as we know of it, and mobile, uh, and P Cs on the edge have really birthed the A I age. And the question is what happens next, uh, right? Which is, does it go beyond that? And that I think is, I mean, there's going to be A I that is not just about cognitive work, A I that is also going to accelerate science.

**[0:10:50] Satya Nadella:** So I think that that's an exciting space. Uh, A I that is going to be embodied in the real world. So what may happen in robotics is an exciting space. And so there is a bunch of things that are going to happen over time. Uh, but clearly, yes, this is year two of a complete new paradigm that obviously reinforces what happened pre or builds on what happened previously, but also also is showing early signs of what happens next.

**[0:11:16] Nicolai Tangen:** If there had been no shortage of, um, uh, chips now, would the development have gone even faster?

**[0:11:22] Satya Nadella:** That's a good question in the sense of scaling laws, right? There are two sides to it, right? There's the the training side and the inference side. On the training side, clearly, uh, compute and compute scale and the scaling laws have proven to be very successful. Uh, and the question is, how long does that go? Is there going to be another model architecture breakthrough or what have you? Uh, I I think that, uh, one has to see.

**[0:11:47] Satya Nadella:** It's, uh, it's unclear, uh, but we definitely are not going to bet against scaling laws, nor are we going to bet against, uh, or not are we going to say that this is the last model architecture breakthrough. In fact, a great example of it is even, uh, what we've we've seen even with, uh, our small language model innovation, like Phi, right? Which is we are able to create what is significant, um, capabilities, uh, in a small language model, uh, which, uh, doesn't require, obviously, the same amount of compute, right?

**[0:12:18] Satya Nadella:** Which is, uh, like, just like attention is everything, uh, attention is all you need, uh, textbooks is all you need. I mean, that sort of intuitively speaks to, uh, how I think, you know, learning can happen. And so therefore, I would say, uh, yes, if more com more more capacity there is in the world, the chances are that we will be able to pro make progress. But at the same time, I wouldn't discount a real breakthrough, uh, in model architecture that doesn't perhaps require, uh, the same type of compute.

**[0:12:50] Satya Nadella:** So that's why I think, um, at least I want to keep myself open minded about it.

**[0:12:55] Nicolai Tangen:** Talking of, uh, small language models, do you think a small country like Norway should develop its own model?

**[0:12:59] Satya Nadella:** You know, one of the things that I've studied, there's an economist out of Dartmouth, his name is Diego Coman, and he did one of the best longitudinal studies, uh, of technology diffusion. And the fundamental conclusion, um, paraphrasing, was that any country that wants to get ahead should one first make sure that they don't reinvent the wheel, which is they import the best general purpose technology that is available in and then on top of it build value at.

**[0:13:33] Satya Nadella:** So I think, for example, uh, even on for Norway, first thing I would do is if we feel like, for whatever reason, these foundation models are not good at Norwegian or what have you, then let's make sure they're fine-tuning. And there there are many things one could do even top of foundation models, like an open A I model or a mistral or what have you. So there are ways you can add unique knowledge, unique value on top of even what exists.

**[0:14:00] Satya Nadella:** Uh, before you go off and say, let's build all the compute, all of it, and do the same pre-training run. Uh, you know, there's no nothing stopping any country from doing any of this. Uh, but the question is, what is the value add? And so therefore, I think that you start from the value add and then back into whatever is needed for it.

**[0:14:18] Nicolai Tangen:** When you look at how, uh, important the big technology companies have become in in geopolitics, how do you reflect on that?

**[0:14:25] Satya Nadella:** Well, I mean, at the end of the day, um, there are two things, right? One is I'm very, very grounded on the fact that we are a multinational company that is, uh, definitely, in this case, a U S based multinational company that has to earn permission and license to operate one country at a time, right? So therefore, I I think of the, uh, we're not nation states are the ones that have power. We get to operate in any nation based on our ability to contribute to that country's progress, right?

**[0:14:55] Satya Nadella:** So whenever I am, right, whether I'm in Norway or I'm in, uh, um, in, uh, in Jakarta, or, uh, or New Delhi, or wherever, I I am always grounded on, uh, fundamentally, the fact is, are we able to make, you know, look, the local politicians and political leadership and society at large in the eyes and say that we contributed to their public sector becoming more efficient or large multinational companies in the region becoming more globally competitive because of some tech input, education outcome, health outcome, small businesses and their productivity.

**[0:15:33] Satya Nadella:** At the end of the day, you, your your social contract with the country, uh, comes from your ability to contribute to their local progress. And that so I don't think we we can ever be beyond geopolitics will exist with or without us, and our goal has to be how do you participate and have permission to operate?

**[0:15:57] Nicolai Tangen:** Moving on. In your book, um, refresh, you talk about three areas. You talk about, uh, a I, you talk about quantum computing and mixed reality. What kind of opportunities are you seeing in quantum computing?

**[0:16:09] Satya Nadella:** It's fascinating. In fact, I I think of all those three still, right? For example, when I think about, um, uh, mixed reality, I think of it as that's an embodied A I, right? Effectively, whether it's autonomous, uh, vehicles, robotics, or people with glasses, they're all seeing the real world is the prompt, effectively. So your real world understanding. So therefore, I think of in the generation of A I, some of these things become even more interesting and more important.

**[0:16:37] Satya Nadella:** And we do need to broaden the aperture versus thinking narrowly of just, uh, one device or one form factor. Similarly, quantum is a fascinating thing. When I I men mention science, right? One of the things I look at it and say is in order to make progress on science, you need great in silico simulation. Quantum is the ultimate breakthrough, right? So when we have a complete new system architecture that go breaks free of the von Neumann limitation, uh, you are then finally going to be able to simulate something like the dynamics of a cell or a molecule, right?

**[0:17:10] Satya Nadella:** So that I think when you can do that, then everything else, even in terms of biology or what have you, uh, becomes more feasible. The interesting thing is A I is kind of like an emulator of that simulator. In other words, you can kind of simplify the search space. And we see this already, Nicolai. One of the things we did recently, uh, was, um, we have a um, uh, from a model, uh, for material science, which we use to generate a new, uh, novel compound, which we then went and manufactured.

**[0:17:41] Satya Nadella:** We worked with the Pacific National Lab locally here to effectively go reduce the uh, then the lithium content, uh, by 70% in a new battery material, uh, and produced it, right? Not just conceptualized it, but simulated it, produced it. And so to me, uh, something where, like, quantum plus A I, I think, can be the ultimate accelerator of science. Uh, and we are making progress, right? We will even on quantum, we are taking a very full stack approach.

**[0:18:12] Satya Nadella:** Uh, we have our software stack with, uh, you know, our, uh, Q sharp, uh, which is our quantum programming stack. So we are excited about sort of the progress we're making on quantum and how it complements A I.

**[0:18:26] Nicolai Tangen:** And where does the gaming fit into this?

**[0:18:28] Satya Nadella:** Yeah, so to me, uh, one of the things, in fact, Microsoft was in gaming long before we we you know, we were into Windows. In fact, flight simulator, I think, was launched long before Windows was launched. So, uh, we are very, very excited, obviously, now with Activision as part of Microsoft, we have mobile gaming, we have cloud gaming, we have, uh, console gaming, P C gaming. So we're a full stack game publ publisher, uh, as well as a game systems provider.

**[0:18:52] Satya Nadella:** Um, and so our goal there is one we're in gaming for our love of gaming, right? So I always sort of say we should never be in businesses as a means to some other end. It has to be an end, otherwise it's not a business. So to me, gaming, uh, is something where we want to bring joy of gaming. That's the one pure consumer entertainment category. I love the fact that gaming on a secular basis is probably going to be, if not already, the biggest entertainment category out there.

**[0:19:18] Satya Nadella:** So that's one. And of course, it has real implications on the rest of it, right? If you think about even remember, it's interesting. I've not talked to Jensen about it, but one of the greatest sort of successes of, uh, G P U's, uh, was fostered by innovation in gaming, right? D X, which was the Microsoft graphics stack, is what made G P U's, uh, an accelerator, uh, right? After all, the G P U's were created for P C gaming.

**[0:19:48] Satya Nadella:** One of the things that we want to use A I is to be able to find these bugs in these even closed worlds, uh, before they're out there. And so therefore, we have some very great use cases there. Uh, but beyond that, I think gaming as, uh, data in the context of, uh, some of the innovation, uh, in our models, I think is going to be important.

**[0:20:08] Nicolai Tangen:** Do you game yourself?

**[0:20:09] Satya Nadella:** I'm a, you know, a light gamer. I used to, uh, do a lot more. Civ was my favorite game. Age of Empires is another great game that I enjoyed. I wish I could play more, uh, but, you know, from time to time, I slip into it.

**[0:20:31] Nicolai Tangen:** You have really changed the culture at Microsoft. When you look back, what do you think are the most important changes you've made?

**[0:20:38] Satya Nadella:** Look, I mean, Nicolai, I sort of, first of all, I've, as I said, I've grown up all my professional career for most part is all Microsoft. So, uh, you know, when you say I've been at Microsoft for thirty two years, all the good, the bad, uh, I was part of it, right? So I don't sort of somehow think that I'm I don't rep. I represent all errors of Microsoft.

**[0:20:59] Nicolai Tangen:** Yeah, which makes it even more incredible that you have made these changes.

**[0:21:03] Satya Nadella:** Yeah, and the way, though, I came about it is quite frankly, as a consummate insider, I basically pattern matched as to, hey, what were the thing? When were we at our best? Uh, what was the cultural set of attributes that helped us succeed? And then when we failed, what were the cultural attributes that caused that failure? And then, you know, dampen this latter and amplify the former. That was as simple as that. So one of the things I look back, even in my, uh, you know, career at Microsoft, when we first became the largest market cap company, I forget, I think in the early 2000s, I think we crossed G.

**[0:21:40] Satya Nadella:** You know, people on our campus prob were walking around, including me, thinking, oh, we must be God's gifts to humankind because we are so brilliant and what have you? Except what we needed to be grounded on that day was to say, wow, we now have a real responsibility to reground ourselves, to innovate again, uh, so that we are relevant in the future, right? And so that's why I I was lucky enough to have read, uh, Carol Dweck's book on mindset, which is around child psychology, called growth mindset.

**[0:22:12] Satya Nadella:** And I love that book. I read it more on the context of sort of our children's education. But I must say I got educated because I felt like this is, uh, what makes individuals, children in school, it's very clear, right? It's better to be a learn it all versus a know it all. Because even if the know it all has great innate capability, uh, the learn it all, you know, even if they start from behind, they will surpass the know it all, right?

**[0:22:39] Satya Nadella:** That's sort of, uh, you know, true for children in school, it's true for C E Os in my seat, uh, it's true for companies. And so we took that approach, uh, Nicolai. We said, let's be a learn it all versus a know it all. Uh, and the day you say you've achieved that cultural transformation means you're a know it all. So therefore, it is a good, a way to sort of say every day you make a bunch of mistakes, you at least have the courage to acknowledge them and continue on it.

**[0:23:11] Satya Nadella:** And so it's, uh, it's not a destination you ever reach.

**[0:23:14] Nicolai Tangen:** But how do you get the the uh organization to buy into that? How do you get it to penetrate down towards the permafrost in the organization?

**[0:23:21] Satya Nadella:** It's a beautiful, it's a great, uh, point. So I think the way I I I think, see, the problem of corporations, especially for non-founder companies. And founders have great power and great followership, and that's why I think they're so successful, or at least, you know, at least we only talk about the successful founders. But if you set that that class aside for mere mortals like me, uh, it can't be like, okay, new dogma from a new C E O and more corporate speak.

**[0:23:48] Satya Nadella:** It has to appeal to us as human beings. That's why I, you know, I credit more of this work, uh, by Carol and team and so on, because it's not like, you know, it's not like, I don't think anybody at Microsoft views growth mindset as some Microsoft dogma or definitely not Satya Nadella dogma. It is something that speaks to them as humans, right? Which is, it's good for them as friends, colleagues, partners, parents, neighbors. It integrates work in life.

**[0:24:17] Satya Nadella:** They can bring their own personality and passion to it, uh, and benefit from it, right? I I always say, like, you're not do like this Microsoft culture of growth mindset is not for Microsoft, it's for you. And if you you should only practice it if you feel like it speaks to your own thriving at Microsoft and in life. Uh, that's, I think, what I attribute it to, right? It wouldn't have taken off if it was just another thing that is a top-down slogan.

**[0:24:45] Satya Nadella:** Uh, it is, ult. I always have believed that, which is ultimately people work, uh, and find meaning in work, uh, only if they can find some true deeper meaning for themselves. And so that's, I think, what I've been always trying to invoke.

**[0:25:01] Nicolai Tangen:** Well, they clearly also have found, um, true, deeper meaning in in the concept of empathy, because, uh, you talked a lot about that, and you say that it's key to innovation and leadership and so on. So what do you? Um, why? Why is that? Why is it so important for you?

**[0:25:15] Satya Nadella:** I think about this as, um, you know, like, if I think most people think of empathy as some kind of a soft skill that's interesting in the context of your family or personal life and works all about hardcore, you know, whatever, right? But that. But I I look at that and say again, what is where does innovation come from, right? Innovation comes from us being able to drive the solutions to unmet, unarticulated needs of customers out there, right?

**[0:25:47] Satya Nadella:** So the key being unmet and unarticulated. So that means you have to have a better sense when you're even looking at some log data or, you know, uh, some customer interview data or whatever. You know, it's not just the words that they're saying, but you've got to be able to walk in their shoes. Uh, and the good news there is, this is innate in us all human beings. We have, uh, the ability to empathize with the other person.

**[0:26:14] Satya Nadella:** Um, in fact, design thinking is that, right? So when people go and say, let's do learn about design thinking, design thinking is applied empathy. Uh, and so to me, uh, that's what I pull the thread on, which is let's not think of empathy as something that, you know, is just a soft skill that you reserve for your friends and family. But it's, I think it's at the root of all innovation. Uh, it's about being able to meet the unmet, unarticulated needs that comes from your unique, I mean, your innate ability to have curiosity to learn about others, walk in their shoes, innovate on their behalf.

**[0:26:50] Satya Nadella:** Uh, and that, I think, is, I think, what we have to do. And that's why I I think empathy is an important, important skill for all of us.

**[0:26:57] Nicolai Tangen:** When did you first discover the power of empathy? I mean, I've read your book, fant fantastic book. You talk very warmly about your mother, she being very empathetic.

**[0:27:07] Satya Nadella:** Yeah, and you know, I think that one of the things that I I feel like all of us learn how to turn on this bit of empathy through life's experience, right? So, in some sense, every day you get confronted with different circumstances, not just yourself personally, but people around you. Uh, for me, obviously, the birth of my son, uh, for both my wife and me was, uh, was a life changing event, and it was something that, uh, you know, over the years, I at least learned a lot because I I remember in the early days it was all about sort of my son was born with cerebral palsy.

**[0:27:49] Satya Nadella:** He passed away a few years ago. Uh, and, um, uh, but, you know, in the when the when he was born, it was a lot about what happened to me. I was sort of, you know, essentially quote unquote, um, you know, and, uh, you know, all about why did this happen to us? Why did it happen to me? How? And then I realized after watching, in some sense, my wife, uh, who was there as a caregiver, as a parent, uh, you know, taking him up and down Seattle to every therapy possible.

**[0:28:18] Satya Nadella:** Uh, quite frankly, you know, it took me years, not, you know, days or months or weeks. Um, and, um, and then I realized that nothing had happened to me, but something had happened to my son and I needed to be there for my son. And that is the experience I talk a lot about, but there's experiences like that every day, right? Some colleague of mine comes with some, you know, parent of theirs who needs care, right?

**[0:28:43] Satya Nadella:** That sort of, you know, I learn from it. I or at least let me put it this way, I am more attuned to learning from other people's experiences today than I was in the beginning of my career. And I think that happens to all of us, right? Which is life's experiences, if they they accrue, uh, that ability to build a deeper empathy for other people. And that also helps you be a better manager, a better coworker, a better, uh, innovator.

**[0:29:13] Nicolai Tangen:** Yeah, thanks for sharing. Do you, um, think there is a contradiction between empathy and execution?

**[0:29:21] Satya Nadella:** I don't, right? I think that at the end of the day, to me, you have to take accountability, right? So this is one of the things that, uh, in business, um, like in life too, right? Uh, you have to be accountable for making real progress. Uh, one of the things I think about, why do businesses exist? Businesses exist, at least I like this Colin Mayer definition that you have to create profitable solution to challenges of people and planet, uh, because that's at least a good way to allocate the global resources that are available, right?

**[0:29:56] Satya Nadella:** The profit motive is a good motive because it means you're competing and allocating resources in the most efficient ways and, uh, and face competition. And so therefore, you have to have great execution, you have to have great accountability. And so I think of empathy as a necessary condition to create great solutions that are profitable and that are competitive solutions that are winning in the marketplace, as opposed to somehow this being a trade-off.

**[0:30:26] Nicolai Tangen:** When you look at your skill set and your personality, what do you think it is that makes you so effective as a leader?

**[0:30:32] Satya Nadella:** I mean, first of all, right? I I I don't think of this as I I I don't know I have causality here, uh, well understood, because quite frankly, it's so much easier for others to opine on this than or rather, it's it's just really for others to judge and as sign, uh, causality there. But the way, at least I come at this is, I don't start with, uh, what am I good at? I am very keenly shaped by what am I not good at.

**[0:31:05] Satya Nadella:** Uh, in in other words, I'm always looking, what can I learn from someone else? So if there's one attribute I have, I don't start each day by thinking, oh, all the stuff I know and I'm good at. I'm like, wow, what am I weak at? Whom do I talk to? Whom do I meet? How do I really shape the colleagues around me who have better skills than me on many fronts? Uh, that's what I'm wired. Like, maybe that helps, but I don't know whether that's the causality.

**[0:31:32] Satya Nadella:** But I don't start each day with saying, Wow, I'm so good at this, so therefore I'm gonna go do this. No, I come at the exact opposite, uh, which is

**[0:31:39] Nicolai Tangen:** Is this something you learn from Bill Gates? Because he said the same thing, right? He is a he is really a learner too, right?

**[0:31:45] Satya Nadella:** I mean, it's a good point. Both Bill and Steve, uh, there is, uh, there's a sense at Microsoft, I think that that's an interesting thing. We're gonna be fifty years next year. Um, there is, you know, what Andy Grove would talk, the paranoid, survive, or what have you, um, and I don't come at it, though, with paranoia, right? I I mean, I don't like paranoia. I like this. That's why I go back to my own words for this is that's why the the growth mindset, or confronting your own fixed mindset, having confidence that, wow, what an unbelievable world we live in that every customer can teach me, every partner can teach me, every colleague can teach me, like, what more

**[0:32:22] Satya Nadella:** can I ask for in life? Uh, so it's not paranoia, it's not like, oh, wow, we have to go in every day, uh, that if I don't learn something, I'll, you know, fail. I'm more about, like, what do I learn so that I can innovate? Maybe, uh, that's how I come at it, and that's right. Bill and Steve, in their own unique way, uh, had that mindset, and so I've grown up around it.

**[0:32:44] Nicolai Tangen:** And how do you install that kind of? I mean, it is humbleness in a way, right? How do you install that in an organization?

**[0:32:50] Satya Nadella:** You know, I at the end of the day, you know, look, I think different people, like, you know, come at it. Like, I think if there's anything, uh, you know, humbleness is an interesting word, right? I I always say that you you need confidence, um, and, uh, humility, uh, and not hubris, right? Because there is sometimes confidence with humility can al allow you to really make great progress, but confidence that translates into hubris can bring, you know, it's a downfall of, you know, civilizations, empires, and individuals, right?

**[0:33:23] Satya Nadella:** And from ancient Greece to modern Silicon Valley. And so that's why I think, uh, you have to sort of really get that calibration that you gotta have some confidence in your own capability.

**[0:33:34] Nicolai Tangen:** You said in the podcast with, um, with our common friend Adam Grant that, uh, your father, he had a list of people he met and a list of ideas generated. Have you got a list of people you want to meet?

**[0:33:46] Satya Nadella:** Yeah, yeah, so I I

**[0:33:48] Nicolai Tangen:** What's do you still got?

**[0:33:48] Satya Nadella:** I you know, he had this note, you know, his diaries were full of that schema, uh, which is, uh, people met, uh, ideas generated and tasks completed, which I love, which is a beautiful way each day to keep account of, uh, and absolutely, uh, so that's sort of like I I took that, um, to heart, and that's essentially how that's my framework for life as well.

**[0:34:14] Nicolai Tangen:** Another thing that makes you s stand out is, you know, there is a saying most people ignore most poetry because most poetry ignores most people. Uh, that's clearly clearly not the case for you. Tell me about your love for poetry.

**[0:34:26] Satya Nadella:** I love poetry, you know, fa you know, the biggest in in an interesting way. I got into poetry very late. Uh, my mom was a a professor of Sanskrit drama and, um, and, uh, and so she really instilled in me, or at least tried to instill in me, the love for, uh, um, uh, you know, poetry, and, uh, in her case, you know, Sanskrit, uh, literature and poetry and what have you. But, uh, I I think of it as compression.

**[0:34:56] Satya Nadella:** It's the best, like, when you think about code, uh, it's as I coded more, is when I sort of sort of felt like, wow, poetry is basically natural language compression, um, and it is able to describe, you know, it's it's it's a model of the world in the most, uh, succinct form. And so there's, um, and I I got into Urdu poetry in a big way in my mid-thirties, and so, uh, I grew up in Hyderabad, where obviously Urdu poetry was in the air, um, and now, of course, I love it.

**[0:35:28] Satya Nadella:** But even, you know, late, you know, I've, I've, you know, the American poets, uh, the English romantics, Germans, they're fast. I mean, like, so I I'm at least I I'm not I, I wouldn't say I am, I know much poetry, uh, but I at least I'm fascinated by the ability of the human mind to compress, uh, thought, whether it's code or poetry.

**[0:35:50] Nicolai Tangen:** Well, that's fantastic. Last question, um, Satya, we have, um, tens of thousands of young people listening to this. What is your best advice to young people?

**[0:35:57] Satya Nadella:** You know, the best advice for anyone starting out in, I, oh, you know, so it's sort of advice I got, uh, which I paraphrase as never wait for your next job to do your best work, right? Which is one of the things is any job you get. Like, I don't remember ever at Microsoft feeling like, oh, I have to get a promotion in order to feel more satisfied or more fulfilled. Because I somehow felt I had gotten the lottery and I was in the best job I could ever be in.

**[0:36:31] Satya Nadella:** And I'm not saying you shouldn't have ambition, you shouldn't strive for your next promotion, you shouldn't put advocate for yourself or have others. You absolutely should do all that. But at the same time, really, my advice would be also to take the job you have at hand and do an wonderful, you know, go at it with, uh, all of you, the vigor and all of the energy, and also define it as broadly as possible, right? I mean, that is perhaps one of the things when I look back at it.

**[0:37:01] Satya Nadella:** I never defined my job narrowly, uh, and that I think was both very satisfying in the moment and it helped, I think, land me the next job. And so that that that is my, perhaps the one advice I would leave people with.

**[0:37:16] Nicolai Tangen:** Well, I cannot think of anybody who is doing a better job than you. So, uh, big thanks for being in the show. Good luck with everything, and, uh, you know, all the best.

**[0:37:25] Satya Nadella:** Thank you so much, Nicolai. Such a pleasure.

**[0:37:27] Nicolai Tangen:** Thank you.