Satya Nadella is the CEO of Microsoft. Seems like a sharp guy.
He’s said the following on the Q1FY25 earnings call:1
Satya Nadella
One of the things that may not be as evident is that we are not actually selling raw GPUs for other people to train. In fact, that’s a business we turn away, because we have so much demand on inference that we are not taking what I would – in fact, there’s a huge adverse selection problem today where people, it’s just a bunch of tech companies still using VC money to buy a bunch of GPUs. We really are not even participating in most of that, because we are literally going to the real demand, which is in the enterprise space, or our own products like GitHub Copilot or M365 Copilot.
I feel the quality of our revenue is also pretty superior in that context. And that’s what gives us even the conviction, to even Amy’s answers previously about our capital spend, is if this was just all about a bunch of people training large models and that was all we got, then that would be, ultimately still waiting, to your point, for someone to actually have demand, which is real. And in our case, the good news here is we have a diversified portfolio. We’re seeing real demand across all of that portfolio.