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.
From A frontier without an ecosystem is not stable (June 2026):
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the real opportunity is not in picking the best model but instead in building a learning loop on top of models where human capital and token capital compound. You can offload a task, or even a job, but you can never offload your learning.
Don’t understand this opportunity. To develop a product? Framework? Process? Unclear how this becomes a differentiator for an organization.
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Private evals should capture whether a model is actually improving against outcomes that matter to the business (not just external benchmarks!).
Mirrors my sentiments in benchmarking. Leaderboards are a bad predictor of outcomes.
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Think about what happened in the first phase of globalization where entire industrial economies were hollowed out by outsourcing. The GDP numbers looked fine on the surface, but the displacement was real and the consequences are still being felt. Let us not bring that dynamic into the AI era, with a small number of AI systems capturing all the economic returns, while entire industries find their knowledge commoditized right out from underneath them.
Good luck. This is not how capitalism works, and the CEO of one of the world’s most valuable companies knows this.
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our priority has to be building a frontier ecosystem, not just a frontier model, so value flows broadly across every company, every industry, and every country. One where every organization can own the learning loop that encodes its institutional knowledge, compounding its human and token capital.
This is the value that companies like VAST are bringing to the table.