WEBVTT - Satya Nadella Talks New AI Powered Windows, Fostering Competition

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news.

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<v Speaker 2>Welcome to our Bloomberg television and radio audiences. I'm here

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<v Speaker 2>in Redmend, Washington with Microsoft CEO Sacha Nadala with some

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<v Speaker 2>big unveilings at Build today.

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<v Speaker 1>Sacha, thank you so much for joining us.

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<v Speaker 2>You've got a new version of Windows powered by AI

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<v Speaker 2>that basically means you have your own AI agent on

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<v Speaker 2>your own device. How will this AI powered hardware experience

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<v Speaker 2>be totally different from what we've seen before?

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<v Speaker 3>First, well, thank you so much for having me Emily

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<v Speaker 3>end up.

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<v Speaker 4>Yeah, I mean it's really a ground up, you know,

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<v Speaker 4>reimagination from Silicon So we have a new SoC that

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<v Speaker 4>has the NPU. So think about it as we've always

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<v Speaker 4>had CPUs and GPUs and now you have newler processing

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<v Speaker 4>units to in fact locally process these AI models. We

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<v Speaker 4>have forty plus AI models that are local.

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<v Speaker 3>On Window.

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<v Speaker 4>Those machines that then are being used by a variety

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<v Speaker 4>of experiences that we are built into Windows, starting with

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<v Speaker 4>this photographic memory feature called Recall, which is just phenomenal.

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<v Speaker 4>And of course Copilot is built in to Windows and

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<v Speaker 4>Copilot is just not an app, it's sort of a

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<v Speaker 4>shell affordance that's going to be there assisting you as

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<v Speaker 4>you be. Showed a demo of somebody playing Minecraft, and

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<v Speaker 4>you know me just sharing my Minecraft screen with Copilot,

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<v Speaker 4>and Copilot helps me finally me as competitive with my

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<v Speaker 4>daughter on Minecraft has always dreamed of, right and so,

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<v Speaker 4>and then of course the third parties, I mean, Adobe

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<v Speaker 4>showed how they're take bringing all of what they do

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<v Speaker 4>to Copilot plus PC's and many many more other developers.

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<v Speaker 4>So it's an exciting day for us to have a

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<v Speaker 4>complete rethink on the full stack of windows for the AI.

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<v Speaker 2>Ah, I bet you're pretty good on Minecraft just a hunch.

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<v Speaker 2>This new feature recall means your computer basically has a

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<v Speaker 2>photographic memory of.

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<v Speaker 1>Everything you do on it.

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<v Speaker 2>And the speed at which this is all happening is

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<v Speaker 2>just so fast. It seems so unpressed. How will this

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<v Speaker 2>really make things different for consumers and change our daily routines?

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<v Speaker 4>Yeah, I think if you think about the PC, it

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<v Speaker 4>has always been about you know, creating things right, which

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<v Speaker 4>is it's about being able to synthesize lots of information,

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<v Speaker 4>create new information, pass better judgment, gain insights, and act. Right,

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<v Speaker 4>that's what you sort of do on a PC. AI

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<v Speaker 4>is an assistant AI helps you, as a as an

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<v Speaker 4>end user, do anything right. One of the most beautiful

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<v Speaker 4>demos today was even this thing called co Create. Right.

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<v Speaker 4>I am in paint and I'm painting a nice spring

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<v Speaker 4>Seattle day and I want mountains with wildflowers, and I

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<v Speaker 4>can now have the AI assistant that painter and me

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<v Speaker 4>now can be inspired by AI. But ultimately I am

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<v Speaker 4>the one painting and I get that satisfactor like I feel.

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<v Speaker 4>One of the things that's been one of my coworkers

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<v Speaker 4>was telling me when her five year old is saying,

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<v Speaker 4>for the first time, give me designer time. That's what felt,

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<v Speaker 4>you know, it feels like in the late eighties and

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<v Speaker 4>the early nineties when we all got fell in love

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<v Speaker 4>with PCs, that was what really gods going, which is

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<v Speaker 4>the ability to use computers to create. And I think

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<v Speaker 4>this AI is just going to take it to the

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<v Speaker 4>next level.

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<v Speaker 2>Microsoft has had trouble keeping up with some of the

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<v Speaker 2>new cutting edge Max and you did do a lot

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<v Speaker 2>of side by side comparisons today. Have you narrowed the

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<v Speaker 2>gap today truly? And how much share do you think

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<v Speaker 2>you can take from Apple?

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<v Speaker 4>Well, I mean, I think today was a day where

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<v Speaker 4>we brought some of the efforts that we've had for

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<v Speaker 4>a long time all into focus and really brought cohesiveness

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<v Speaker 4>to them. For example, we've been on this journey to

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<v Speaker 4>bring I call it arm based PCs for a while.

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<v Speaker 4>Finally we now have the best ARM processors, which are

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<v Speaker 4>really the performance of the CPU itself is cutting edge.

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<v Speaker 4>Then you combine it with the NPU and these experiences.

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<v Speaker 4>I think we are now going to start just like

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<v Speaker 4>you know, when it comes to the cloud.

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<v Speaker 3>Let me take you another one, right, which is.

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<v Speaker 4>When we were We came from second and what became

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<v Speaker 4>a leader in the AI age on the cloud.

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<v Speaker 3>I hope on the PC we bring good competition. I mean,

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<v Speaker 3>Apple has done a fantastic job.

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<v Speaker 4>We now want to bring real competition back to the

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<v Speaker 4>Windows versus Mac.

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<v Speaker 3>When it comes to the aihe.

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<v Speaker 2>You've been doing a lot of unique deals to move quickly,

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<v Speaker 2>for example, this six hundred and fifty million dollar investment

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<v Speaker 2>in Inflection.

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<v Speaker 1>You hire the team, you hire the co founder, must

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<v Speaker 1>office Suliman. Are you at all.

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<v Speaker 2>Worried that regulators are going to crack down on investments

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<v Speaker 2>and aqua hires the way they have cracked down on

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<v Speaker 2>M and A like.

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<v Speaker 1>Do you wish you could be buying these companies outright.

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<v Speaker 4>I mean, look, I mean the regulators have to do

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<v Speaker 4>what they have to do to make sure that ultimately

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<v Speaker 4>there's competition, right, I mean, if that is the case,

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<v Speaker 4>then I think I think one of the fundamental things

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<v Speaker 4>that I think all regulators need to stay rounded on

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<v Speaker 4>is where is competition?

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<v Speaker 3>What are the sources of competition, and how.

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<v Speaker 4>To foster them? To me, that's what we're doing right today.

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<v Speaker 4>There is formidable amount of competition, right, whether it is

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<v Speaker 4>between the big players or the small pla and there's

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<v Speaker 4>partnerships are also a source of competition. So I don't

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<v Speaker 4>think that this is about any one company acquiring or

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<v Speaker 4>not acquiring, But it's about competition. And as long as

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<v Speaker 4>regulators focused on that and we focus on it, I

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<v Speaker 4>think we'll be fine.

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<v Speaker 2>Microsoft just took a big stake in the Abu Dhabi

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<v Speaker 2>AI company G forty two.

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<v Speaker 1>Brad Smith joined the board.

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<v Speaker 2>This is a company that at least at one point

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<v Speaker 2>had ties to China. So there do seem to be

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<v Speaker 2>some big geopolitical implications here.

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<v Speaker 1>Is this your play in a tech cold war?

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<v Speaker 4>You know, first of all, you know it is important

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<v Speaker 4>for us to be grounded on the fact that we're

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<v Speaker 4>a multinational company, but that also happens to be an

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<v Speaker 4>American company. So we did this partnership with G forty

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<v Speaker 4>two and the UAE, with sort of the real involvement

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<v Speaker 4>of the US government as well, where the US government

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<v Speaker 4>has now an assurance program with the UAE, which both

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<v Speaker 4>the government, you know, it's a state to state agreement,

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<v Speaker 4>and that allowed us in fact created the conditions for

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<v Speaker 4>G forty.

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<v Speaker 3>Two and Microsoft to come together.

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<v Speaker 4>But I think it's important for us as a company

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<v Speaker 4>to be grounded in the fact that we need great

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<v Speaker 4>partners who then allow us to expand what we are

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<v Speaker 4>doing globally, right because at the end of the day,

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<v Speaker 4>one of my dreams has always been Emily that can

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<v Speaker 4>the you know, the information revolution, perhaps after the Industrial

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<v Speaker 4>Revolution was magical in the sense that it diffused fast

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<v Speaker 4>around the world, but this intelligence revolution, to me, can

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<v Speaker 4>even take it even to the next level, right, which

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<v Speaker 4>is when people in the Middle East, or whether it's

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<v Speaker 4>in Asia or Africa or Latin America can enjoy the

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<v Speaker 4>benefits of this technological wave. That's not going to that's

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<v Speaker 4>going to require real partnerships, And I'm very, very excited

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<v Speaker 4>about this one.

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<v Speaker 2>Open Ai is your closest partner in Microsoft hit history.

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<v Speaker 2>They just released a chat GPT app for Mac before Windows,

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<v Speaker 2>and we're reporting the same as going to happen for

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<v Speaker 2>the iPhone. How do you balance partnering with them and

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<v Speaker 2>competing for their attention?

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<v Speaker 3>Yeah?

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<v Speaker 4>First of all, you know, like open Ai, you know,

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<v Speaker 4>will decide how to prioritize platforms and and how to

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<v Speaker 4>really go about managing their roadmap.

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<v Speaker 3>Would be very excited.

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<v Speaker 4>In fact, you know, I'm thrilled to you know today

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<v Speaker 4>when you saw the launch, we basically took gpto and

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<v Speaker 4>made it part of Core Pilot. So Windows is going

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<v Speaker 4>to have some of the latest innovation from open Ai

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<v Speaker 4>and the latest innovation from Microsoft built into Windows. So therefore,

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<v Speaker 4>I'm thrilled about their prioritization of the Mac.

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<v Speaker 1>Chat GPT four. Oh is you know, it's pretty big?

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<v Speaker 4>Wow.

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<v Speaker 1>Have you tried chat GPT five?

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<v Speaker 3>So that the latest? Oh?

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<v Speaker 4>Yeah, of course?

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<v Speaker 1>What about the next one? We hear reasons you mean,

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<v Speaker 1>so the.

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<v Speaker 4>Next version, which I believe is not been named, so

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<v Speaker 4>I don't want to talk for them, but you know, look,

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<v Speaker 4>I think open Ai as a company has really focused

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<v Speaker 4>a lot on not only moving the frontier forward, but

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<v Speaker 4>also doing it with really safety first, and so they're

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<v Speaker 4>very carefully thinking about what's the next big model. But

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<v Speaker 4>the thing that GPTO like, I don't want to understate

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<v Speaker 4>the innovation in what they just launched last week, right,

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<v Speaker 4>which is just the first time they've been able to

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<v Speaker 4>bring ultimodal capabilities natively into the model. And you're seeing

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<v Speaker 4>it like in the wild as you use copilot or

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<v Speaker 4>chat GPT you can see the power.

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<v Speaker 3>You know.

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<v Speaker 4>It's most people think, oh, GPT four came out what

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<v Speaker 4>fifteen sixteen months ago, but it's not been static. It

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<v Speaker 4>has been continuously getting better and we're excited about it.

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<v Speaker 2>So on that note, you stress trust a lot in

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<v Speaker 2>your keynote today, But there have been renewed concerns over

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<v Speaker 2>the week and about safety at open AI. More key

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<v Speaker 2>employees have left, one saying safety has taken a backseat to.

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<v Speaker 1>Shiny new products.

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<v Speaker 2>What kind of conversations have you had with Sam Molman

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<v Speaker 2>about this look.

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<v Speaker 4>I mean, at least one of the fundamental things that

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<v Speaker 4>broad Open Air and Microsoft together way back even in

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<v Speaker 4>twenty nineteen was that focus on how do we make

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<v Speaker 4>sure that we could make progress. At that time, it

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<v Speaker 4>is not even clearest whether things will even work the

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<v Speaker 4>way they work, right, But even there, that company was

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<v Speaker 4>very grounded on their mission around Hey, we want to

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<v Speaker 4>bring the benefits of this to the broadest set of

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<v Speaker 4>audience and do it safely. So and that requires, at

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<v Speaker 4>least in my mind, I fall into the camp of

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<v Speaker 4>iterative development of it. Right, you got you can't just

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<v Speaker 4>be in the lab. You have to get it into

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<v Speaker 4>the real world. See the adversarial attacks, make the safety

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<v Speaker 4>harnesses better. That doesn't mean you don't take safety first

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<v Speaker 4>as the most important feature. In fact, I say, even

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<v Speaker 4>at Microsoft, which is the most important feature of Azure

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<v Speaker 4>AI is our safety service, because that's what even gives

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<v Speaker 4>us permission to deploy anything.

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<v Speaker 3>You can't just deploy.

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<v Speaker 4>I mean, if I take the base model, like even

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<v Speaker 4>take today's announcement, it's just so important, right, Windows now

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<v Speaker 4>will have forty plus models that are going to be

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<v Speaker 4>onboard on Windows. But guess what, in order to keep

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<v Speaker 4>them safe, we will use the Azure AI service because

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<v Speaker 4>we will be learning every hour of every day what

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<v Speaker 4>is the new adversarial attack, and that knowledge, that learning

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<v Speaker 4>will keep all the AI models safe. Because the next

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<v Speaker 4>jail break that happens, we'll learn about it and make

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<v Speaker 4>sure that that doesn't happen on the local model. And

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<v Speaker 4>so that's I think the only way we're going to

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<v Speaker 4>keep AI.

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<v Speaker 2>Safe, all right, Microsoft CEA, oh saucha nidala, thank you

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<v Speaker 2>so much for joining us. I'm going to send it

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<v Speaker 2>back to you guys, and thanks to our Bloomberg television

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<v Speaker 2>and radio audiences,