Satya Nadella describes how lessons from Microsoft’s history apply to today’s boom

Satya Nadella, CEO of Microsoft, sits down with John to discuss the diffusion of AI inside the enterprise. He explains why “all your data at your fingertips” is the evergreen pitch, why this AI CapEx cycle is different from the .com bubble, and his vision for "agentic commerce". They also cover Microsoft's product bundling strategy and how he "wanders the virtual corridors" of Teams to run the company. Links [Read] Softwar https://www.amazon.com/Softwar-Intimate-Portrait-Ellison-Oracle/dp/0743225058/ref=sr_1_1?crid=1OG55PILJSCAY&dib=eyJ2IjoiMSJ9.aWbcQ6qiqb5rxmEcLya4GOLcnWGkQ81VaMNni6JW9R6SzISnfX6xa_cyNVyGLT0sAXXc0Beu8he17lLeal34gE0Foo5d3kyEr4z9NIf64lVJT7cU2-Ujxlj2Vg4hi_WTMs-gjqGtsxpXvTGO6YA9HZ1S_VqP9mEwgKkbzmn9nxAz1558sfMaTDB4_-hFgS4paWXQO0EM-X7_bVqwYadCOgBD5VSAFvJbdm3vwQlmuV0.fhQ9y62SOkSdB23wEwMwW4JvC1Urmlydzxnrt5hPrEk&dib_tag=se&keywords=software+oracle&qid=1763146215&s=books&sprefix=softwar+oracle%2Cstripbooks-intl-ship%2C128&sr=1-1: An Intimate Portrait of Larry Ellison and Oracle, Matthew Symonds[Try] Superwhisper https://superwhisper.com/[Read] The Internet Tidal Wave http://news.bbc.co.uk/1/shared/bsp/hi/pdfs/18_06_08_internet%20tidal%20wave.pdf, Bill Gates Timestamps (00:00) AI adoption in the enterprise (07:47) How Satya runs Microsoft (13:45) New UIs (20:44) Microsoft tackling the early internet (25:58) Are we in a bubble? (31:35) Data sovereignty (38:10) Excel (42:01) Agentic commerce (52:45) AI brand loyalty (59:44) Product bundling (01:08:18) Microsoft’s culture (01:12:12) The law of very large companies (01:16:20) What’s in the water in Hyderabad?

• 0:00Speaker 00

  Satya Nadella took over as Microsoft CEO in 2014, but he's been with the company for more than 30 years and has seen a lot. Microsoft has grown by 10x in the time that Satya has been running it, and he's credited with Microsoft's success, first in cloud and now in the AI boom. Cheers, John. It was great.

• 0:19Speaker 00

  So what should people be excited about at Ignite?

• 0:22Speaker 01

  The Ignite conference for us, more than anything else, is about making sure that AI is getting diffused inside of the enterprise, right? I mean, if there is one thing, it's more about, hey, what does it mean not to just admire somebody else's AI factory or AI agent, but how to build your own AI factories? Organizing the data layer turns out to be probably the most complicated thing, which spans the enterprise such that it can meet the intelligence. And so that's the stuff that I think we'll probably do a lot of.

• 0:53Speaker 00

  We still don't really have deep research in a corporate context.

• 0:59Speaker 01

  We do. That's what Copilot is about.

• 1:01Speaker 00

  But most people day to day do not have this. So are they just underusing AI that exists?

• 1:05Speaker 01

  In fact, it's interesting you brought that up because to me, that is the killer feature, right? So the biggest thing we did was we took this graph that is underneath what is what I think is the most important database in any company, right? Which is underneath your email, your documents, your Teams calls, what have you. It's the relationships that, by the way, people are not working in an ad hoc fashion, in an unstructured way, but they're all doing it in relation of some business event.

• 1:36Speaker 00

  Yes.

• 1:37Speaker 01

  That semantic connection is in people's heads and it's lost. And for the first time, there's much better recall of that.

• 1:46Speaker 00

  Why do you think this is underpenetrated than the enterprise? Because I feel like people are using lots of LLM tools. They are uploading individual documents maybe, but I don't think most companies have the all singing, all dancing, all of the company's context is plugged into their everyday AI.

• 2:04Speaker 01

  Yeah, in fact, I would say there are two sets of things. One, it's starting, right? I mean, I always say, at least compared to... Anything we have done in terms of all the office suites over our history, this is the fastest.

• 2:15Speaker 00

  Yes.

• 2:16Speaker 01

  In that sense, because it's change management and at the end of the day, you got to get it in. People have to use it. Oh, by the way, in the enterprise setting, it has got to mean all e-discovery has to work. All of the data governance has to work. We have had to plumb this purview into co-pilots such that anytime I'm trying to retrieve something that's confidential. It's labeled confidential, it's IRM'd and so on. So there's been significant amount of work and that I think is where we're starting to see the uplift. The other thing I'd say is, you know, it's one thing to do, we have it work across the Microsoft three, six, five graph, right? But then the next thing is, oh, what about your ERP system? The connectors kind of work, but they don't really because they're too thin straws, right?

• 2:59Speaker 01

  You just need a much better data architecture where you have to essentially semantically embed.

• 3:06Speaker 00

  Yes.

• 3:06Speaker 01

  All of these into one layer.

• 3:08Speaker 00

  Okay, there's been a vision for decades of your company's data at your fingertips. My favorite example of this is, I really like the book Software on the history of Oracle. And it talks about Larry Ellison doing EBCs, I think they're talking about one in Japan in the 1990s. So it's late 1990s and he is pitching executives on all your company's data in one place. Part of the reason this is an evergreen pitch is because companies don't actually have all their data at their fingertips. Companies do not eat their data infrastructure vegetables. And the pitch to executives always, you can go answer your questions yourself at the touch of a button. As opposed to sending a request to an analyst who goes and does an investigation for you.

• 3:51Speaker 00

  Will we finally this time eat our data plumbing? You can push back on the premise, but that's my question.

• 3:56Speaker 01

  No, I think that in fact, I think if I'm not mistaken, Bill coined this term. Information at your fingertips at a Comtech speech, I think in the 90s.

• 4:05Speaker 00

  I think that's right.

• 4:05Speaker 01

  Yeah, and that is kind of where, you know, and so we, and for the longest time, Bill was always obsessed about like he felt that. In fact, I remember him distinctly saying this in the 90s, which I picked up in one of the reviews I was in as a junior guy sitting around. And he said, there's only one. Category in software, it's called information management. You've got to schematize people, places and things, and that's it. You don't have to do anything more because all software. And that was the dream Bill always had, which is he wanted like, for example, he hated file systems because they were unstructured. He would have loved it if everything was a SQL database. And he could just do SQL queries and program against all information. Like that to him was like an elegant solution to information at your fingertips. The problem is, people are messy.

• 4:48Speaker 01

  And even if people, data is structured, it sort of is not truly available in one index, right? Or one SQL query that I can run against all of that. So that has been the fundamental challenge of the old world, I would say. I would not thought, none of us thought, that somehow this AI thing and a deep neural network at some scaling will suddenly become the thing that figures out the patterns, right? Not some schematized data model, right? In fact, one of the longest time we used to always obsess about, oh, how complex do the relationships have to be? Or the data model needs to be to capture the essence of an enterprise, right?

• 5:29Speaker 01

  And it turns out it's lots of parameters in a neural network with a lot of compute power.

• 5:35Speaker 00

  Dorkesh talks about this really smart remote employee who started five minutes ago, getting at the point that the models can be arbitrarily smart. And they can do RAG and they can have access to everything in your enterprise. But it's not quite the same as the model actually knowing something as a model. And so the models, unless you train custom models inside your company, cannot actually get smarter at what it is that you do. And, you know, the thousandth query is not any smarter than the first. Where do you think that goes?

• 6:03Speaker 01

  I think there are two things there. I think, I mean, I think if I understand his thing, it's all about in-context learning or continual learning, right? I mean, that's sort of the ultimate thing. And it sort of speaks to the thing I was saying, which is if you kind of have the model's cognitive core separated from its knowledge, then you have essentially the continual learning, you know, formulas or the algorithm. And then you just unleash it. There, at least there are three things to me. That are outside of the model at runtime that I think you kind of have to crack, right? One is memory and all forms of memory, right? Short, long, right? Even like this, these big challenges of, you know, humans are great at long-term credit assignment, right?

• 6:46Speaker 01

  Which is how does intuitively, like somebody said to me, hey, the day, you know, AI models can both reward and remember that you, you know, how to punish for some mistake? Because they have the ability to do a long-term credit assignment. That's when you'll know they have real memory. But in any case, memory is one. The second one is entitlements, right? So which is they have to really respect all of the permissioning system at runtime, right? Because this is where, because there are roles, what access do I have? And so the model needs to meet that. And then the action space all has to work. So if you bring those three things, because after all, that's the environment. So if I have actions, entitlements and memory with these models

• 7:30Speaker 01

  and they have, by definition, have to be outside of the model, but be built into the model. And I think that's, and so for example, in Copilot today, you use OpenAI models, you use even Claude, right? I need the system to work across both of those. And that, I think, is where the frontier has to move to.

• 7:46Speaker 00

  Yes, yes. I have a million more AI questions, but I want to ask you some questions about your way of working. So what does your day-to-day look like? And in particular, how are you managing by walking around? What's virtual corridors? Are you wondering to just get a sense for what's going on on Microsoft? What are your customer engagements actually look like just for a normal day? Not earnings or not a board meeting or something?

• 8:11Speaker 01

  Interestingly enough, my normal day is it's the two ends of it, right? Which is the the customer stuff. So there's not a day that I would say I'm not having, many of them are remote. I mean, there's Teams calls for me most of the day, at least two or three of them with some customers. It's sort of the most helpful way for me to stay most grounded, I would say. So I have at least one or two of those each day. And then I'd say there is a lot of meeting time, you know.

• 8:46Speaker 01

  You know, as a CEO, one of the things I've recognized is there are two types of meetings, right? One meeting is where I'm just supposed to convene and, you know, keep my mouth shut. Because convening was the real thing, right? It is like, don't overperform and just sit and because all the work would have either happened or will happen after. But so that's kind of one. And then the other meeting, which are the important meetings where I do need to learn or I need to make a decision or communicate something. So meetings is another spot. Then I must say, it's kind of like all over for me Teams channels, right? I am lingering around Teams channels and they're most helpful. In fact, if anything,

• 9:25Speaker 01

  I learn the most there. I meet most people there. So wandering the halls, I wish I can tell you that, you know, that is the form.

• 9:34Speaker 00

  No, but I think Teams is the new wandering the halls, right? You know, looking around those channels.

• 9:39Speaker 01

  Hundred percent. And then I meet, the most beautiful thing is for me to be able to, that's where I make the most connections, right? I get to know, wow, he's the person working on Excel Agent. Oh, that's the eval that they're looking. I mean, I learn so much out of it than anything else I've done.

• 9:54Speaker 00

  So are Teams at Microsoft just working away on their product and then Satya pops up and, you know, has a question on their product?

• 10:00Speaker 01

  Some of it, like I wish.

• 10:01Speaker 00

  They give a little yell.

• 10:02Speaker 01

  I wish, yeah, yeah. I wish, you know, sometimes I feel like we are way too permissioned to, you know, I wish I had more access sometimes. In fact, my biggest complaint is that I can't drop it everywhere I want to. But yes, it's fun to be able to just go in there. And it sort of normalizes it. And then people are also like, today's workforce is not shy of sharing their opinion with you.

• 10:26Speaker 00

  I've noticed, yeah. You are famous, at least in small corners of the valley, speaking of being methodical, for staying very connected to what's going on in tech here. And I remember you came and visited the Stripe office. Remember that one, the mission? Yeah, when we were a pipsqueak company. I mean, we were probably right after you took over as CEO, I'm guessing. But Stripe was very small and Microsoft was very big.

• 10:52Speaker 01

  Actually, before. I think the first time I came to your offices was when I was running Azure first.

• 10:56Speaker 00

  Okay, yeah, yeah. Okay, so it was even before that. So that would have been very early in Stripe's journey. Why do you think you do this much more than most other CEOs? Because other CEOs should want to meet all the startups too.

• 11:08Speaker 01

  I've always grown up in some sense, I grew up even in a Microsoft which had, I have that developer relations evangelism sort of gene in me. I kind of approach, I think, a lot of it as, hey, if you don't follow developers. There are two sort of things that are ingrained in me. One is if you don't follow where developers are going, it's hard to sort of be relevant in them sort of tech platforms. And then you really need to understand the new workload in order to build a tech platform. Those are the two things that at least I've kept. And so therefore, the only way, if you're not following startups, it's very hard to know what is neither the platform or the workload. So that's sort of a thing that I've indexed towards. And the other thing is, it's just, you know, I derive so much energy out of it.

• 11:53Speaker 01

  I mean, I've always thought founders are just magical people who create something from nothing. I mean, it just sort of feels like a magic trick. So I always think, how the heck does one do that?

• 12:01Speaker 00

  Yeah, it's funny you say that about following what the startups are doing. We always conceived of what Stripe was building as, it was important to build for startups, both because today's small startups are tomorrow's public companies, and we've seen that again and again on Stripe. But we just felt at an intuitive level, and we felt this before we could prove it, that what the startups were interested in were often better product experiences. And so if the startups want stable coins or usage-based billing or what have you, we should build for those needs, not just because we'll have a good startup business, but the enterprises will come around. And it took us, I would say, many years to kind of prove out that model. But now we're really seeing.

• 12:45Speaker 01

  Yeah, in fact, I think you guys are a bit of a gold standard on that. In fact, one of the things that I learned from you guys was that rediscovering at some level what Microsoft was very good at, which is following the developer, being where the startups are. And so that's what sort of led me even to GitHub and Nat and all of the rest, which is, to some degree, the GitHub asset, right? At least here is a great asset. We needed to, one, be good stewards of an Open source ecosystem.

• 13:12Speaker 00

  Yes.

• 13:12Speaker 01

  But it also the place where every startup, like the one thing that everybody does have is their repos in GitHub. And I felt like, hey, being in that loop was important for us, not just, oh, it's strategically great to have some position there. To learn, simply, and to build better product, I think is sort of well said, because you lose sometimes the aesthetic of what is required, what's that friction free way to deliver, because the least amount of patience is there. And the time to value, for example, has to be maximized.

• 13:46Speaker 00

  Is Microsoft thinking about generated UIs that are personalized, like when you think about it, software is stuck in the old paradigm of, you know, we write a bunch of software and it goes to gold master and it's, you know, it goes out on disks. And now that same kind of software is delivered in the cloud. But the UI you want is probably, you know, we can render that exact UI in real time. Is that a direction you guys are going?

• 14:08Speaker 01

  I think for sure, like at some level, what's happening is on one side, our ability to generate. I mean, if you sort of say you can generate all code, so therefore you can generate some UX scaffolding around anything. That's a lot more custom, right? So especially, in fact, for the longest time, one of the things at Microsoft was, what's the difference between a document, a website and an application, really? And so to some degree, yeah, exactly. So you can generate any one of those at any time, depending on what format you want to present it. But at the same, interestingly enough, for all the talk of, hey, all these apps go, take even our good old IDEs.

• 14:52Speaker 01

  In some sense, IDEs are back, right? Whether it's Excel or VS Code, because the reality is AI generates output.

• 15:02Speaker 00

  Yep.

• 15:03Speaker 01

  I need to make sense of that output. In fact, I need a fantastic editor that lets me do diffs.

• 15:11Speaker 00

  Yes.

• 15:11Speaker 01

  And iterations on it with AI. So the IDE, I think, in fact, one of the most exciting things is new classes of highly refined. IDEs that have even a sort of a telemetry loop with the intelligence layer. But also, they kind of act more like heads up displays, right? I have thousands of agents going off. How am I going to make sense of the the micro steering of thousands of agents?

• 15:36Speaker 00

  Right.

• 15:37Speaker 01

  And that is what IDEs slash inboxes and messaging tools will be, right? Which is, I'm not messaging one type, one, you know, or dealing with triage the way I deal with it today. But it's going to be different.

• 15:48Speaker 00

  Okay, interesting. So you think right now programmers spend all their time in an IDE. But they're one of the few professions that does that. And your vision is the accountant IDE, the lawyer IDE and?

• 15:59Speaker 01

  What is the metaphor of how I will work with agents, right? So it's kind of like massive macro delegation, right? So there's lots of agents. I go and give a bunch of instructions to, and they go off and work sometimes for hours, days, let's say, you know, as the models get better. But they are checking in and so that it's macro delegation, micro steering.

• 16:17Speaker 00

  Yep.

• 16:18Speaker 01

  So if you take that, where does, how does one do micro steering with context, right? It can't come back like my, it can't be in the next notification hell, right? Which is, it sort of notifies me, it has like five words, I don't know exactly what the real context is or what have you. That, I think, is where, and that has to be multi-app like, right? So that's where I feel like all software, finally, when it grows up, it looks like an inbox and a messaging tool. And a canvas with a blinking screen, except this time around, a lot of work got, you know, went hap- and happened.

• 16:49Speaker 00

  Is that one app? Is that ten different apps? Like, it's kind of interesting if you think about the productivity suite that emerged. There was, you know, three big apps in Word, Excel and PowerPoint. But it's interesting that that number was not one and was not forty, it was three. And so how do you think about this?

• 17:10Speaker 01

  I think that's right. I mean, to me, it will be a few, I think. And in fact, the reductionist person, you know, in me says, man, they'll be the same things. Except the job they do is going to be different. Because I think, you know, a table. At least at the human level, right? Because we can all talk about like what tools will agents use to communicate with each other? Right? That's a different thing, right? They don't, they, right now for the RL loop, they are simulating our production environment. But they will ultimately be more efficient in creating their own production environments to kind of RL

• 17:45Speaker 00

  Yes.

• 17:45Speaker 01

  themselves. So but let's just leave that aside. But in order to communicate with us, I feel like we have discovered some good things that we like. We like spreadsheet and tables and we like documents in sort of linear form. Uh, we like inboxes or messaging tools. So these are like reasonable UIs.

• 18:06Speaker 00

  Yeah.

• 18:06Speaker 01

  Except the question I think you asked is, how does this thing have, when it shows up in an IDE with like a set of changes? You have to help me more than just say, okay, now here is a file, go to that file. Like, like that directed plan, not just to execute,

• 18:23Speaker 00

  Yes.

• 18:23Speaker 01

  but for me to do my workflow.

• 18:26Speaker 00

  Yes.

• 18:26Speaker 01

  Uh, like one of the things that we are experimenting with is mission control and GitHub Copilot is that, right? Which is, the idea is you go have five, six different branches in which you fire off all these autonomous agents. They all do their work, they come back, and then your ability to do PR triage uh is where I think the next IDE is born.

• 18:45Speaker 00

  I'm struck by in technology, how frequently you see the pattern of excitement for and the vision around a technology being so much earlier than the technology actually being ready. Like the movie 2001: A Space Odyssey, which was in the sixties, like that was a voice activated AI with tool use, you know, capabilities.

• 19:06Speaker 01

  That's true.

• 19:06Speaker 00

  And, you know, it just took fifty years. Uh, and then, you know, people were excited about the idea that you could speak to your computer and your text to speech, speech to text. People were excited about that in the eighties. And like only now, I don't know if you use Super Whisper um or anything like that. But it's really, it's finally really good. But like it wasn't good three years ago, you know, uh forty years after the vision.

• 19:27Speaker 01

  Yeah, it's crazy that you bring that up. In fact, I used to have an apartment right next to the Microsoft campus, that old campus. And I was working on intra- Interactive television. This was in ninety four.

• 19:37Speaker 00

  Yep. The information superhighway.

• 19:39Speaker 01

  That's right. You know, and there are multiple things that are stunning. My management chain was Rick Rashid, who, you know, who reported to Craig Bundy, who reported to Nathan Merewold, and there was Bill Gates, and I was saying, man, that's a lot of IQ. And of course, we all missed the internet. That was the only thing that happened. But I had interactive television.

• 20:01Speaker 00

  Yes.

• 20:01Speaker 01

  Switched ATM, I think, to my home.

• 20:04Speaker 00

  Yep.

• 20:04Speaker 01

  In my apartment. So I had, I remember doing this demo. One of the high stakes things I did as a young guy at Microsoft was a demo of our first redundant file system, which was the video server, where John Malone was the one who came and sort of, Bill was sort of saying, hey, here is the future of interactive television. And guess what? It's even great because the disk can go, you know, haywire and it'll still stream. And so my job was to remove the disk drive and have the stream continue. But we built essentially a distributed file system.

• 20:36Speaker 00

  Yes.

• 20:36Speaker 01

  And a streaming server and had an ATM switch network to the house. And I had like five movies I could watch and I watched them all multiple times.

• 20:44Speaker 00

  Okay, so I want to ask you about this because I've thought a lot about this and you're the perfect person to ask, which is, Microsoft saw the internet future that was coming in the nineties. And in particular, the famous Bill Gates internet tidal wave memo said, the internet is the one big thing Microsoft needs to focus on. It wasn't like we're not thinking about the internet. It wasn't that it was priority number seven of fifteen. It was like, hey, guys, listen up. The only thing Microsoft should be thinking about is the internet. But the, the vision for the internet at the time was this information superhighway, which was subtly different from the internet. Because the thinking was, and it was very sensible thinking, no one has internet to the computer in their home. Like a lot of people don't have a computer in their home.

• 21:27Speaker 00

  So what people do have is a TV and what they have is cable, which is a high bandwidth connection. And so we're going to do these set top boxes on the TV and that is how people will use the internet. Like. Paying a huge amount of attention to this coming wave, pretty sensible, well-thought-out solution, and yet, not the right approach. And so I obviously bring that up in the context of the giant AI. Like, what should one take away from that?

• 21:51Speaker 01

  It's a great one. See, if I look at even my interpretation, it'd be actually interesting. I've not spent as much time talking to Bill about that era. And, uh, but I felt they were at least, as someone, as a sort of an entry-level employee at that time even, my reading of history was that we kind of got the internet, but we didn't. Because we wanted to deliver. Remember the quality, like, I don't think we believed that TCP/IP would work. Right? I mean, at some level, the information highway. Uh, when I look at what we were trying to do was, man, this quality of service is a thing. This TCP/IP, what, it just is not gonna work. And so therefore, uh, we were competing against AOL on dial-up.

• 22:35Speaker 01

  And, uh, even that sort of, you remember, like, MSN was an X dot 25 network.

• 22:40Speaker 00

  Yes, yes.

• 22:40Speaker 01

  The first version of it.

• 22:42Speaker 00

  Yes.

• 22:42Speaker 01

  And so then, but that's when Bill, like, pivoted, right? So the thing that Bill did was, uh, in 95, I guess, in fact, it's funny that right, the Windows 95 was launching, is, and then he says, you know what, it's all gonna change. So I feel between 92, which is when I think all of us maybe got our first demo, right? 93 November is when Mosaic, uh, right? I think something like that. And so we all, you know, were kind of dancing around it. So from 93 to 95, there was that two-year period where it was unclear whether this was going to be the protocol and the full stack, and the stack emerged. And by 95, it was clear.

• 23:24Speaker 00

  Right.

• 23:24Speaker 01

  And then we pivoted.

• 23:26Speaker 00

  Interesting. Okay, so just at that time, it wasn't actually clear that the open internet would win?

• 23:31Speaker 01

  Yes.

• 23:33Speaker 01

  And in fact, there's one more lesson that the interesting thing that I've always watched because I think we can parlay this into AI. One is to get the paradigm right.

• 23:40Speaker 00

  Yes.

• 23:41Speaker 01

  Then it's not clear, even if you get the paradigm right, that you may not get what is the killer app or even the business model. Or what like that's always been the case, right, which is, you know, with the internet. Who would have thought that, you know, for the open web, an organizing layer would be one proprietary or one

• 24:00Speaker 00

  Yes.

• 24:01Speaker 01

  network effect search engine, right?

• 24:02Speaker 00

  Yes.

• 24:03Speaker 01

  Because the organizing layer of the web, you know, I always say like there's no such thing as the open web. There's the Google web and and just because they just dominated it.

• 24:13Speaker 00

  Should one reflect on the fact that

• 24:18Speaker 00

  maybe there was some motivated thinking around our proprietary solution, you know, the Liberty Media Microsoft joint venture will win. Whereas the open web is what won. And you should maybe caution organizations where if they're following two possibilities, you know, our information superhighway proprietary system or the open web. Companies will somehow have happy thinking towards the proprietary solution.

• 24:49Speaker 01

  It's an interesting one. I think the way, you know, when I look back again, it's interesting, right? So AOL and MSN kind of, you know, lost out, let's call it to the open web. Except they were replaced by new forms of AOL and MSN. They're called search engines.

• 25:07Speaker 00

  Right.

• 25:07Speaker 01

  They're called app stores, like the mobile web, in fact, is fascinating.

• 25:10Speaker 00

  The open web was a moment in history.

• 25:12Speaker 01

  A moment in history and then and so the thing that maybe the meta thing for me is organizing layers will always emerge, even in an open ecosystem.

• 25:23Speaker 00

  Yeah.

• 25:23Speaker 01

  And a lot of the category power moves to that organizing layer. And it's always unclear, like the last paradigm of whoa, this last time at a search engine. Today it's chatbots. Is it? Is it? How long lasting is that?

• 25:35Speaker 00

  Yes.

• 25:35Speaker 01

  No one knows, but it's definitely today. I mean, ChatGPT's success cannot be denied in terms of what it means as an aggregation point.

• 25:44Speaker 00

  Yes.

• 25:45Speaker 01

  Um, marketplaces slash app stores have been a thing. What's comes next? You know, what happens to e-commerce in an agentic marketplace or an agentic commerce? I think these are the interesting things that need to be litigated.

• 25:58Speaker 00

  Well, I want to talk about that and I want to talk about commerce, but actually first, while we're on the topic of, while we're still in the 90s,

• 26:04Speaker 00

  everyone is making comparisons to the dot com bubble right now. It's almost a cliche. And I think it's actually a reasonable comparison, you know, it's cliche for a reason, which is it is a very capex intensive build out for a new paradigm that is in fact a big deal, and yet there's an awful lot of capex. You were there at Microsoft during the 2000 dot com bubble. And it really was, you know, Microsoft's share price peaked in the late 90s, early 2000s, and then didn't surpass it until 2016, I want to say. What did it feel like in 1999? In particular, did you know you were in a bubble or was it like, oh, this is the new, this time it's different?

• 26:47Speaker 01

  It's interesting, yeah. So in 1990, yeah, in fact, I remember, I think we probably became the largest market cap company in 2000. We crossed GE, I remember that. You know, we were capital light, let's say, right? That time around, it was like, I guess I was more like Sam at that time, which is somebody else's capital was being spent. It is, quite honestly, when I look back at it, at that time too, the financial cycle aside, it was clear, the secular trend was clear that this is going to, because even the, by then, the business models were also emerging, right? Even for Microsoft, the biggest lesson at that time was, oh my God, like even our first order play,

• 27:33Speaker 01

  oh, we got to build a browser, we got to build a web server, we've got to, you know, have internet protocols everywhere. All, oh, we got, you know, we had a website builder inside of Office with front page. We did all the obvious things. But we realized that just doing the obvious things didn't make sense. We needed to reinvent what we were doing, plus one of the new business models was clear. So in an interesting way, that cycle

• 28:00Speaker 01

  kind of came out of nowhere. I mean, it came out of, you know, what was just, you know, whatever rational exuberance or what have you. But the correction, in some sense, washed away a bunch of stuff, but I would say the ideas persisted.

• 28:16Speaker 00

  Totally.

• 28:16Speaker 01

  Right? And so to me, I think about what's happening here, two, I mean, there are two things, right? The infrastructure itself that's getting laid out. I think it's got a lot more, uh, more immediate. Like, it's not like even the, you know, the gestation period of, okay, I built a, you know, dark fiber, which, and, you know, some internet company will first scale to a billion users and use.

• 28:38Speaker 00

  Yes. So our lines out the door to buy this stuff.

• 28:40Speaker 01

  Exactly. And so this time around, quite frankly, we are behind, right? It was not that, like, when I look at our infrastructure build, right, and demand today.

• 28:49Speaker 00

  Yes.

• 28:49Speaker 01

  That's the thing that when people say it's all, you know, there's a bubble, like, when I look at my earnings, I can have, like, I mean, this is the last, when was the last time I was so supply constrained on power shells?

• 28:59Speaker 00

  I haven't heard that comparison before, which is, let's not forget that the dot com bubble, which again was a telecoms bubble, was a fiber bubble, uh, in a big way, like, it was dark fiber, it was, the clue's in the name, it was dark, it was not lit up yet. And this is anything but dark fiber.

• 29:16Speaker 01

  Yeah, it's not like any one of us is sitting there and saying, hey, I have all the GPUs wired up.

• 29:21Speaker 00

  Right.

• 29:21Speaker 01

  And nobody's using them. I don't have a utilization problem.

• 29:24Speaker 00

  Yes.

• 29:25Speaker 01

  I may have a P U E, like, I mean, I want higher utilization because it's mostly because it's memory bottleneck or what have you. But that is a different, like, there is not a thing that I have that's not sold out. In fact, my problem is, I gotta bring more supply. And in that will we perfectly get it? No one does, right? There's no supply chain operation that perfectly matches demand and supply. But this time around, the build out, you know, given the long lead, like, for example, one of the things we study a lot is, uh, even when we talk about our capital, we try to describe it even to the street, hey, you gotta remember these assets, some of these assets are 20 years.

• 30:02Speaker 00

  Yep.

• 30:03Speaker 01

  Uh, some of these things are four years or five years. And in fact, you kind of have to make the decisions on those things differently, right? Having a cold shell, uh, that's unused is nothing, uh, right? It's like, yeah, it's kind of like having a campus with five buildings. It's not sort of going to be a problem on a Microsoft's balance sheet. What is a real problem would be, uh, hey, not having warm shells.

• 30:27Speaker 00

  Right.

• 30:28Speaker 01

  Um, that we can kind of light up.

• 30:30Speaker 00

  Where is the bottleneck these days? Like, is it electricians, is it shells, is it turbines?

• 30:37Speaker 01

  Yeah, the product that is the bottleneck is just a bunch of powered up shells, right? So if I don't have enough shells that are powered, that I can then roll in my racks and then make them operational. And that's the long lead part, right? Which is you kind of have to have the land permits, the power permits, get all that done in time. And by the way, location, right? So I think one of the things that's glossed over, of course, stateside, United States, we're building a lot. But we have to build all over the world. And there are data regulations, in fact, more every day. People care about sovereignty in a major, major way.

• 31:21Speaker 01

  And so therefore, for us, we have to make sure that the fleet is a global fleet, a fleet that kind of can deal with all types of workloads, training to data gen, to inference. And so it's sort of a complex, multi-variable thing.

• 31:36Speaker 00

  Who should care about data sovereignty? Where, you know, Ireland has a bunch of data centers, but is not particularly wound up on the idea that, you know, data should only be in Ireland. And I don't think it should be super wound up about that fact. But I guess, do you guys just go with whatever the country wants? Or do you try to advise on whether you should want data sovereignty or not, and who should?

• 31:58Speaker 01

  Yeah, so I think it's obviously a topic that's top of mind for pretty much every country, every policymaker. And they care, and there is obviously real legitimate reasons. The thing that I would say in the AI age, I'm now thinking a little bit differently even about sovereignty. What I mean by that is the ultimate sovereignty question is more of the, what's the future of a corporation? Right? Like, I mean, if you sort of start by, you know, if you go to the core of the Coase theorem, you say, wow, what the heck? You know, if the model is the thing that knows everything. Why do I even like I'm supposed to have some tacit knowledge that makes the transactional costs inside my organization lower than just being in the marketplace? So that's a mind bender.

• 32:43Speaker 01

  So in fact, one of the ways I think is the sovereignty that matters is your company's sovereignty in an age where there are continual learning, increasing returns to a model. So I'm increasingly thinking that, hey, company's ability to have that intelligence layer that's a scaffold or even weight embedded in the model. Like, so it's not somebody else's foundation model. It's about, do you have sovereignty in your foundation model? So my new concept is the future of a company is that company has its own foundation model that captures essentially that tacit knowledge that makes the transactional costs of how knowledge gets accrued and diffused inside the organization faster.

• 33:27Speaker 01

  So that's sort of a long speech on sovereignty.

• 33:30Speaker 00

  There's two versions. That's very interesting. The idea that AI maybe just changes the nature of companies. And you're saying that if companies, some companies are already collections of IP, right? You know, Disney or we said Dave Ricks from Eli Lilly here, that is an IP company in a big way. And some companies are already collections of IP, but right now that IP is in all the emails and documents and people's heads, most importantly. Whereas maybe the IP could be in a single model over time. Where I thought you were going to go with that is just maybe the, you know, people point

• 34:15Speaker 00

  out a lot that current companies are modeled after, you know, manufacturing companies and Alfred Sloan type stuff, despite the fact that, you know, we're doing knowledge work today and not running a little manufacturing line. And do you get more just weird looking companies? Do you get the, you know, the famous really tiny billion dollar company? Do you get more highly distributed internet companies? Do you get some DAOs? I thought that's where you're going to go with that.

• 34:39Speaker 01

  I think that those are also possibilities. So the structure itself could change and it's going to be more possible for, you know, whatever the few, you know, the one person billion dollar company, what have you, that may not happen or DAOs could happen. But the interesting question, at least for me, is Where does tacit knowledge reside?

• 35:00Speaker 00

  Yes.

• 35:00Speaker 01

  Right? Clearly, it resides in people's heads and it's the classic know-how that accrues and compounds.

• 35:07Speaker 00

  Yes.

• 35:08Speaker 01

  I think it will also reside and compound as weights in some lower layer that is unique to your company.

• 35:17Speaker 00

  Yeah.

• 35:17Speaker 01

  So that's kind of my, so in fact, I feel like, hey, you know, the new intellectual property.

• 35:24Speaker 00

  Yes.

• 35:24Speaker 01

  At Eli Lilly or at Microsoft or at Stripe, at some point can be also, besides all the humans.

• 35:32Speaker 00

  Yes.

• 35:32Speaker 01

  Besides all the other artifacts we have.

• 35:34Speaker 00

  Yes.

• 35:35Speaker 01

  I think we will also say, oh, they are in some embedding.

• 35:38Speaker 00

  Yes. Well, okay, it's funny you say this because Stripe, Stripe is interesting because it does not really have strong network effects as a company. You know, when we started building up Stripe, it was very much a single-player API experience and we make it easy to start using Stripe. But ultimately, you kind of, you'd never know that anyone else was using Stripe. What's happened as we've scaled up is we now just have a trust network where we can prevent fraud by virtue of the fact that we've seen

• 36:06Speaker 01

  Yeah.

• 36:06Speaker 00

  most internet users. And so we have a knowledge for what good and bad looks like. And even the fact that we haven't seen you before is inherently a little bit suspicious because we've seen, you know, we've seen most people. And so it becomes a reputation network, kind of like Recaptcha for Google.

• 36:21Speaker 01

  Yeah.

• 36:22Speaker 00

  Similarly became kind of a reputation network. Anyway, what we're now doing is training a payments foundation model where we're using all the data that we have in the Stripe network and you have a much larger, more capable model taking into account. So anyway, we are trying to do exactly what you're saying.

• 36:36Speaker 01

  And so one of the questions for all of us who have, so then how do you protect that

• 36:40Speaker 00

  Mm-hmm.

• 36:40Speaker 01

  from sort of essentially leaking over to the base foundation model? Is it just like one capability hop away because it learned how to even do fraud detection?

• 36:51Speaker 00

  Yes, yeah.

• 36:52Speaker 01

  Is it just some other multi-dimensional or not? And that I think is the key question, right? To me, I think we, there are, there are two arguments, right? One argument is it's that, you know, argument that, hey, the models are going to eat the world.

• 37:04Speaker 00

  Yes.

• 37:04Speaker 01

  Uh, you can kind of ease. Oh yeah, after all, everything is just a pattern and I'll learn it all and what have you. So but then the thing though is you could, to your point about Stripe, can take multiple models.

• 37:17Speaker 00

  Yes.

• 37:17Speaker 01

  Build this unbelievable sort of, I'll call it fraud detection layer. Now that is, you know, model forward. And then there is this memory and tools use and action space that's all unique to Stripe. That to me is the future of a corporation, whether it's a pharma company, a payments company or a software company. That I think is the work that we all are doing and will do. And I I think that that's, to me, that is sovereignty, right?

• 37:47Speaker 00

  I'm still thinking about this discussion we're having about the IDE for people who are in software engineers. And again, I feel like there could be a product in the next 10 years for finance people. Where in hindsight, it is obviously the correct UI. But just like the spreadsheet kinda came out of nowhere as a UI. It it may feel like it came out of nowhere at that time. Let me strip that out. Speaking of the spreadsheet, it's like a rite of passage for certain software companies to try to take on Excel. And it's seems to be doing pretty well 40 years in or what have you. Why is it so durable?

• 38:24Speaker 01

  Yeah, it's it's unbelievable, right? I mean, at some level, you know, the the idea that

• 38:34Speaker 01

  a tabular form, I mean, I think it's the power of lists and tables.

• 38:39Speaker 00

  Yes.

• 38:39Speaker 01

  It's just a perfect and and and the malleability of software, right? That was, I think, the combination. So that's, I think that's where the, what's the durability of a, that's why a blinking canvas, right? It's sort of like, it's always going to be there. We may add lots of bells and whistles to it.

• 38:55Speaker 00

  Yes.

• 38:56Speaker 01

  And the same thing with spreadsheets. The other thing about the spreadsheet is it's turing complete, right? I mean, that's the the other, you know, we sort of don't give it enough credit. It's like, I can make it do everything.

• 39:07Speaker 00

  World's most approachable programming environment.

• 39:09Speaker 01

  Hundred percent. I mean, it's kind of like, you know, and you get into it without even thinking you're programming.

• 39:14Speaker 00

  Yeah.

• 39:15Speaker 01

  And that is the other beauty, right? Which is like, you know, like AI still, we mystified it. You know, it talked about, oh, my God, we need change management. When Excel spreadsheets came, nobody talked about change management. They were just using it, right? And that to me is the other thing, which is, you know, like somebody was describing to me. I was meeting the CEO of Generali. He joined Generali during the fax machine era and he was managing all their insurance agents. And he said to me like, look, I still remember the day when email showed up, Excel showed up and the entire workflow of how things happened completely were upended and evolved and changed, ground up.

• 39:56Speaker 00

  Yes.

• 39:57Speaker 01

  And so to me, I think that that's to your point, what are those things of this era that will discover that'll allow the ground up, re-litigation of the work, the work artifact and the workflow?

• 40:08Speaker 00

  It's such an interesting time to be in software. I mean, compared to, you must feel this, like, it's just a much more interesting time now than five or 10 years ago.

• 40:16Speaker 01

  You know, it is interesting, right? Which is what happened was we were like, you know, cloud, cloud, cloud.

• 40:22Speaker 00

  Yes.

• 40:23Speaker 01

  And, you know, if you had asked me what was the hottest thing in, you know, 2019, we had built this fantastic multi-region or regionless database that was multi-format, right? Cosmos DB, which was like how we had, you know, basically a JSON database. We had, oh, we had a SQL in there.

• 40:45Speaker 00

  Right.

• 40:45Speaker 01

  It was the everything database and we were thinking, oh, and there's region less and blah, blah, blah. And then the pandemic happened and then cloud went into another hyperdrive. I mean, Teams, thank God, just became like the thing. And then, so that was the exciting thing. And lo and behold, you come out of it and you sort of say, oh, I thought, oh, after the pandemic, we're going to get to some stable state. In fact, I remember a forecast of the cloud, you know, we were saying, what do we do? We overbuilt during the pandemic and there was a good eight months.

• 41:21Speaker 00

  Yes.

• 41:21Speaker 01

  Where we were, oh, and then this thing now has come through.

• 41:25Speaker 00

  There's a lot of charts of the shape at Stripe, I don't know if it's this way at Microsoft, where obviously in March 2020, you saw this discontinuity, right? Much more e-commerce activity happening and we saw the rate of online business creation because, you know, you had businesses that were offline only saying, oh, you know, we got to switch to selling online. And it just stayed at that elevated level forever. Obviously, since it's gone up from there, but there was no matching decline as people went back to, you know, into physical offices and things like that. It was just a step change and then it stayed at the elevated level forever. I'm sure you saw some things in Azure and things like that.

• 42:00Speaker 01

  Yeah, it never came down.

• 42:01Speaker 00

  We're talking about commerce, so we might as well talk about what we're working on together.

• 42:04Speaker 01

  So we are very excited about it. I mean, I think the idea that has always been there is, which is, what's the best way for a merchant-friendly set of rails? And what is a customer-friendly set of rails, right? Is there a perfect matching? Conversational sort of commerce is a thing that people have talked about. And now, I think with the work that you all have done and others have done, we kind of can really bring the merchant and the end user.

• 42:36Speaker 00

  Yes.

• 42:36Speaker 01

  And have this agentic sort of experience. So it's early days, it has to be tastefully done. It has to be done in a way that you earn the user's trust.

• 42:45Speaker 00

  Yes.

• 42:46Speaker 01

  And so I'm very excited about it.

• 42:47Speaker 00

  Yeah, we see two differences here, because there have been previous attempts, as you know, buying on Twitter, buying on Instagram, and you know, these kinds of things. But what's different here is, one, you have AI. So all the integrations for the merchant are much easier. It's much less of a lift than previous times when things like that, this have been tried. But then, secondly, I just think the experience is so compelling as an end user. We're already seeing this in the early data from the super early customers that we have. And we launched it a few weeks back in ChatGPT as well. This, just, it has to work. And again, the data is already bearing that out.

• 43:29Speaker 01

  Oh, yeah.

• 43:29Speaker 00

  Because it's so much easier as an end customer.

• 43:31Speaker 01

  Yeah, I've been talking about it like, you know, I'm a bit of a cricket nut. So I kind of, I'm always searching for something. And, you know, the problem is, you know, whether it's Amazon or Walmart or what have you, the search experience sometimes is hard on the site. So interestingly enough, these chat experiences first are fantastic, right? And the fact that they point back to the catalog, I mean, the catalog is still king.

• 43:53Speaker 00

  Yes.

• 43:54Speaker 01

  And but now if I can marry the checkout and the catalog. And that, to me, is where I think the seamlessness.

• 44:00Speaker 00

  Well, and do you have any experiences, I've found versions of this, and Chris, if you've had experiences, where for product research, using an AI app is so much better

• 44:09Speaker 01

  Hundred percent.

• 44:09Speaker 00

  than you keyword-based search. It's amazing that up to last year, we thought keyword-based search was an acceptable way to hunt for.

• 44:17Speaker 01

  Yeah, in fact, that's.

• 44:18Speaker 00

  Anything.

• 44:18Speaker 01

  Yeah, that is, and the bottom line is, it's kind of like it is creating a custom catalog for you, right? I mean, the response.

• 44:25Speaker 00

  Yes.

• 44:26Speaker 01

  Is not like a SERP, right?

• 44:29Speaker 00

  We were buying furniture in our house, and we're just saying, oh, yeah, we have this much space available in this spot. What do you think is a good, you know, piece that would look good in that spot that meets these dimensions and things like that? But it's crazy that we weren't doing that previously, you know what I mean? And so all this kind of customization, being able to give vibes, general aesthetics, I'm looking for like something slightly higher end but not super fancy, you know? It's crazy that you weren't able to.

• 44:57Speaker 01

  By the way, that's just the other crazy, crazy thing. I know my wife is an architect, and so she sort of has this, you know, co-pilot notebook in which she has all these architectural pictures and so on. And you can ask it quite high-level reasoning questions on what I should put in there.

• 45:14Speaker 00

  Yes.

• 45:14Speaker 01

  So it's able to take an architectural sketch or drawing.

• 45:18Speaker 00

  Yes.

• 45:18Speaker 01

  And then take a public catalog of furniture and put those things together and reason about it. And that type of stuff is pretty magical.

• 45:26Speaker 00

  Like, our view on this, we are, as you know, really AI-pilled when it comes to commerce at Stripe, and we think a huge amount will move here, and all the merchant conversations we're having are bearing that out. And the way I think about it is that if you are doing open-ended discovery, oh, I'm interested in an outfit to buy for this occasion, I don't know exactly what I want, AI will be so much better at helping you with that than the current experiences where, you know, you're clicking through a list of search results or something like that. And then if you're doing targeted search, where I'm looking for a specific object that meets these needs, I want this component for my bike, then also being able to specify with AI the exact parameters of the search you have will be much better.

• 46:10Speaker 00

  You're like, wait, if you're taking all of the. Undirected discovery, and if you're also taking all of the highly-directed search, isn't that just like all the commerce that happens on the internet? And the only thing that's left, that's out of that is like recurring staples. I need to order more pet food. That feels to me like the least affected, though of course you have to discover the brand of pet food at some point originally. But yeah, that's, that's kind of how we're thinking about it. And again, Etsy has been an awesome first partner because all the products are custom, right? There's no.

• 46:41Speaker 01

  Yeah, that, that makes a ton of sense to me. I mean, the, the discovery part, uh, which obviously people like Instagram and others have done a great job. So the question is, what's the discovery layer? We have like, that's one of the, you know, obviously personalized discovery layer, inspiration for product, you know, what Pinterest has done is interesting. So some layer like that.

• 47:03Speaker 00

  Yes.

• 47:03Speaker 01

  Married with this conversational interface.

• 47:07Speaker 00

  Well, and of course it'll be a rising tide that lifts all boats where part of what we're doing with this is making merchants' product catalogs remotely discoverable and inventory and everything like that.

• 47:20Speaker 01

  Right.

• 47:21Speaker 00

  And then remotely purchasable, where you don't necessarily have to go through the whole flow on their site and everything like that. You can just do it inside the magic wand copilot experience. And so that is at like the raw nuts and bolts level, what we are doing and what we're wiring up. I think then what's exciting is that again Pinterest played with commerce quite a few years back, maybe 10 years back. It's not, it hasn't taken off as a huge thing, but now if you have all the merchants who are offering their product catalogs as part of this protocol, then social sites like Pinterest and Instagram and Twitter get another run at this kind of commerce experience because you've way more merchant support and adoption for us than you had the first time around.

• 48:00Speaker 01

  Yeah. Now, and we have a project called the NL Web, and the idea is that, which is to really take every catalog of every merchant and give it like essentially a website.

• 48:10Speaker 00

  Yep.

• 48:11Speaker 01

  An NL web interface.

• 48:13Speaker 00

  Yes.

• 48:13Speaker 01

  That then an agent can talk to, to be able to interrogate and get the deep search, so to speak.

• 48:20Speaker 00

  Yes, yes.

• 48:20Speaker 01

  Right, because today, in some sense, one of the biggest challenges is the quality of the catalog and the ability to use reasoning to do a deep search. And if you can solve that, then to your point, every product will find its query.

• 48:34Speaker 00

  Yes. So we're building out this. Platform in agentic commerce where we have some open source protocols like our agenda commerce protocol, we obviously have the regular Stripe products, you know, people are using us for you know, and this it's particularly kind of tricky from a payments point of view because you're looking to have an AI app do payments on behalf of other people across all these different sites on the web without probably sharing all your payment details like all across the web. This is interesting payment things that we're doing. Anyway, we're looking to build a platform business in agentic commerce. You guys seem to know a thing or two. What advice would you have for us as we build in this very nascent space, but when there clearly is product market fit?

• 49:17Speaker 01

  I mean, I think, I mean, you have done that, right? Which is one of the things that I would think is what does it mean to participate in this agentic workflow, right? For every merchant, right? Like, so every merchant now will have to sort of come to someone like Stripe and say, hey, I have a catalog, I have a checkout, please get me to meet agents in the most friction free way. And that's done tastefully is why I would think our hire Stripe for. And I think the merchant onboarding, because I'm assuming the long tail of merchants being able to click and say, hey, enable me for agentic commerce is going to be the thing that's going to drive. Because the good news here is there is going to be multiple. I mean, obviously, ChatGPT is the big one, but there's going to be, I

• 50:02Speaker 01

  mean, you know, Google's going to be there, we're going to be there, Meta will be there, there are perplexity, there's going to be a lot of competition.

• 50:08Speaker 00

  Yes.

• 50:09Speaker 01

  There's going to be a lot of front doors.

• 50:10Speaker 00

  Yes.

• 50:11Speaker 01

  As aggregators. But the more interesting thing is they themselves will, on their website or on their mobile app, will want to support natural language queries. And so all of that being enabled for, or my own agents will go interrogate those things. So I think that that's the key thing to be challenged, you know, or rather really solved well.

• 50:33Speaker 00

  Yes.

• 50:33Speaker 01

  Because going to a small merchant and saying, hey, go stand up an MCP server, do this protocol, that protocol. What's the easy button?

• 50:40Speaker 00

  I think the other thing that's we're going to see is, you're probably seeing this already, emerging of a bunch of the agentic experiences. So we're talking about agentic commerce here. And we had Des Trainer from Intercom. They do, they're now doing customer service, AI mediated and just like replacing humans, doing customer service with AI. But what they're seeing obviously is a huge amount of induced demand where people initially come for the help desk type queries and then it's like, wow, this is honestly a much better way to navigate the website and it's almost like a command line for, you know, it can't quite take as much actions now as it will be able to. But I also wonder

• 51:15Speaker 01

  Interesting.

• 51:15Speaker 00

  how much all these experiences merge where like we're doing the buying stuff over here that is growing and expanding and you know, maybe there's some discovery and things like that. They're doing the customer service stuff over there.

• 51:25Speaker 01

  Universal.

• 51:26Speaker 00

  Yeah.

• 51:27Speaker 01

  That's a good point.

• 51:28Speaker 00

  When does it become a command line application? Like again, my example of this is I find the fashion space interesting where how incredibly poor the tech is with a lot of websites out there where people are trying to do this very aesthetic vibes based, I'm looking for something like that, but like a little more fancy, you know, whatever. And it's all keyword based search and manual tagging and things like that. And things like that feel to me perfectly set up for having an interactive AI based experience where again, like your mid journey prompts, you're like, no, the image wasn't quite right, change it this way. Just doing that with commerce, I think will be really interesting.

• 52:05Speaker 01

  Makes sense. And I also think intuitively, like, I mean, all of us are inside sales is also, or other customer service is also inside sales.

• 52:12Speaker 00

  Exactly.

• 52:12Speaker 01

  Yeah. And so intuitively that makes sense, you know, and definitely in the agentic world.

• 52:17Speaker 00

  Right.

• 52:18Speaker 01

  You can stitch these things together so that the seams are not like to what they are today.

• 52:23Speaker 00

  Maybe what we're describing is a bunch of swim lanes have been

• 52:29Speaker 00

  established by random accidents of software and org charts and everything like that. You do customer service. When people come with a queries of a non-commercial nature, you are an SDR.

• 52:41Speaker 01

  That's right.

• 52:42Speaker 00

  You know, you do whatever and all those distinctions are probably going to get blown away.

• 52:45Speaker 01

  Yeah.

• 52:45Speaker 00

  Yeah. We're talking a lot about kind of the AI apps that people use and Clopilot and ChatGPT and Gemini and all these kind of things. There's a debate about how much model quality matters and is it the case that people pick a brand? And you know, they've been drinking, you know, Coke for the longest time. And even if Coke's, I mean Coke's a bad example because there was a revolt about the change in the formula. But you know, even if they change the formula, you know, people, they still have a preferred brand. You know, I use O three, my wife uses G P T five. I'm almost horrified because I'm like, you know, you deserve more intelligence than that. And you know, you take O three from my cold down hands. Where do you stand on the debate of do people have loyalty to? And there was also the revolt when they tried to take away four O with this.

• 53:25Speaker 01

  That's right.

• 53:25Speaker 00

  And people were really attached to that model. Do people have loyalty to a model or do they have loyalty to an A I. brand? And how does this affect your business strategy?

• 53:33Speaker 01

  I think that in the consumer products, this was the first time we saw that, right? When you changed models, they're not sort of uniform changes. And they impact people differently.

• 53:47Speaker 00

  Yes.

• 53:47Speaker 01

  And personality is one such thing.

• 53:50Speaker 00

  Yeah.

• 53:50Speaker 01

  Or style or what have you. And so it just sort of is a new dimension. So in other words, it's also an argument that, oh, wow, this is a new dimension of perhaps differentiation. Right? People will, you know, it's sort of there's the I Q. side of it. There's the E Q. side of it. And then there is all these style points. And maybe that's kind of one of the things that people will steer things towards. But long term for me, I think you have to kind of make sure that the models are most capable for the hardest, high value tasks. And then you continuously optimize after you have access to that for what the task at hand is.

• 54:34Speaker 01

  Right? So as a product builder for us, my, my thing is have the model drop, which is the most capable. But then what's in production is multiple models. And my favorite like new thing in GitHub, for example, is auto, which is I want to keep, you know, people still obviously love Sonnet, whatever they, they want to use it. But at the end of the day, I really want the model picker. And it just can't be a dumb model router.

• 55:01Speaker 00

  Yes, yes.

• 55:01Speaker 01

  Right? It has to basically have the intelligence to know that this task deserves this.

• 55:09Speaker 01

  Kind of COGS or this type of intelligence.

• 55:11Speaker 00

  Yes.

• 55:12Speaker 01

  And this is my complexity of my repo or my PR task.

• 55:15Speaker 00

  Yes.

• 55:16Speaker 01

  That ultimately is where, you know,

• 55:18Speaker 00

  Yes.

• 55:19Speaker 01

  the future of agents would be, right? Um, and so therefore you want the model, in fact, you want an ensemble.

• 55:25Speaker 00

  Yes.

• 55:25Speaker 01

  of models that then, you know, you have agents intermediating uh, that ensemble so that it meets your needs.

• 55:34Speaker 00

  Yes.

• 55:34Speaker 01

  And then you'll have preferences.

• 55:35Speaker 00

  Will Evan's preference not just be for more intelligence? Like, I'll go into the picker and manually select O three for like, oh, where should I go get ice cream query? Like, I, I all start the most.

• 55:45Speaker 01

  Habit, don't you think? But that is, you know.

• 55:47Speaker 00

  Maybe, but it's also an important considered decision.

• 55:52Speaker 01

  But it is true. I mean, it's very hard for any of us to take our, that's why defaults matter. And we love our defaults. We don't love the cheese to be moved.

• 56:01Speaker 00

  Right.

• 56:01Speaker 01

  You know, even the model selection stuff, you know, it's kind of like, wow, if you now took away the model selection. You know, it's a problem. And so therefore you gotta be careful. But I do think in the long run, if I can trust, that's another one, right? Which is if I can trust something.

• 56:15Speaker 00

  Yes.

• 56:16Speaker 01

  To always do something for me while it's making a selection that somehow is delightful.

• 56:22Speaker 00

  Yep.

• 56:22Speaker 01

  Uh, then that's when I'll hand off.

• 56:24Speaker 00

  Okay, and so you think that's what you need to get to?

• 56:27Speaker 01

  Yeah.

• 56:27Speaker 00

  Is me trusting that you'll pick an appropriate model?

• 56:30Speaker 01

  Exactly.

• 56:31Speaker 00

  Yeah.

• 56:31Speaker 01

  Yeah.

• 56:32Speaker 00

  And then, I mean, my mental model of Microsoft is that you just play at every part of the stack. Uh, in that there is the, uh, you know, you have Copilot, you have your steak and OpenAI, you have, uh, well, we can get to vertical, uh, applications in AI. You have the Azure layer, you have chips, everything, I'm leaving out a whole bunch of stuff. Are some more important to you than others? What is the must win? Will you do verticals?

• 56:55Speaker 01

  Yeah, I mean, it's some of the core. Yeah, well, at the core, the way I kind of conceptualize it is our infrastructure business, we have to be fantastic at building what I'll call the token factory, right? This is the, uh, tokens per dollar per watt.

• 57:07Speaker 00

  Yep.

• 57:07Speaker 01

  Really being super efficient in that. Then I I'll say we have a another layer of it, which is the agent factory. And the difference between the token factory and the agent factory is use the tokens most efficiently to drive a business outcome or a consumer preference outcome, right? Which is that's a Value per token or something. Oh, yeah, the value per token and as evaluated by sort of the specific domain that people care about. And that is to your point, it has tooling around it. It has a whole host. It's it's kind of the new app tier or the app server, right? Every new platform has always had, there was the web and there was a web server. This is the AI server in some sense or the AI cloud.

• 57:48Speaker 01

  Then we will definitely want to build our own, I'll call it systems of intelligence or AI systems that is the family of Copilot, right? Whether it's for information work, that's kind of what we've done for coding or software development. That's the GitHub Copilot. Our security is another domain where we are absolutely going to be a primary. Yeah. Uh, those will be the three horizontal. Uh, we will also have business applications. Yes, yes. Uh, the other one that is we're we're doing a lot in health and science. Hmm. Uh, so in health, the, you know, we had bought Nuance and now we have something called Dax Copilot. And this is the note taking, uh, direcation for physicians, right? So the ability to be able to have a doctor spend more time with their patients.

• 58:32Speaker 01

  And then the AI do everything else in terms of everything from coding to taking the notes. So that's one place we're, you know, have a great close partnership with Epic. It's embedded part of Epic. So that's kind of what we're doing in health. And then, um, we're also doing, uh, stuff in Copilot for consumer health that for docs to it. Yeah. But the other one is a science and the science, it turns out it's a big domain for what I'll call the outer loop orchestration, right? Which is, um, the scientific method in some sense requires you to create the hypothesis, then run these multiple experiments, uh, in silico, come back, refine and so on. So that to me is another tool chain.

• 59:15Speaker 01

  It's kind of like we're trying to discover some combination of the GitHub Pilot meets Microsoft three, six, five, knowledge work, if you will, for the scientist where they're they have the authoritative sources of knowledge. They have even the interfaces tools use could even be a the MCP server for the wet lab, so to speak. Can I interface with it? And then how do you orchestrate all of this such that the scientific loop can go faster?

• 59:45Speaker 00

  As a platform company, you always have decisions around when should you try and bundle products together? When should you try and staple them and mandate they be used together? And when should you not? And you know, I think the classic example, for some reason that everyone talks about, despite it being quite minor, is the fact that Apple originally only let's use an iPod with a Mac and tried to use it to drive Mac sales and then gave up and you know shipped iTunes for Windows. And my understanding, reading the Apple China book, is it was like a totally random decision that someone just made it one, you know, one day. But it's often held up as one of these examples. Obviously, Microsoft, the entire history is full of these interesting examples. I don't think people realize how

• 1:00:30Speaker 00

  open Microsoft was in the early days where in 1985, most of Microsoft's revenue was from Macintosh applications. And then for the Microsoft operating systems, most of the applications were third party, you know, like Lotus one, two, three and things like this. And so it was like a fully open strategy. And then you had the Windows era of the tight coupling between Office and Windows and those kind of mutually reinforcing each other. Then early on, I get the sense Azure and Cloud was, you know, oh, it's a place you can run your SQL server and then fully embracing Linux later on and things like that. I'm curious just to, because again, we think about this as a platform company.

• 1:01:10Speaker 00

  And we've been of late embracing much more modularity where Stripe Radar, you can use it even if you're not using Stripe for payments and things like that. How do you in general? Think about your framework for when products should be coupled versus when you sell them independently.

• 1:01:23Speaker 01

  Great point.

• 1:01:24Speaker 00

  And then I've AI-specific versions.

• 1:01:26Speaker 01

  See, the way, I, I, I reason about this, I think we overstate many times how many of these battles are quote-unquote zero-sum. So at some level, one of the pieces of analysis that I think that you want has to be sharp at is what are by definition going to be multiplayer? Like, cloud is a classic example, right? Which is, I remember even back in the day when I got started, and obviously Azure got started much later than AWS. People would tell me, "Oh, God, isn't AWS so far ahead? Whereas is there a room for a second cloud?" And having competed against Oracle and IBM on all the middle-tier servers and so on, I felt like, no, this enterprise customer and commercial customers by and large

• 1:02:08Speaker 01

  are going to demand sort of multiple. And so that was the structural understanding that drove us to even just be at it. And, and the rest is history. So a little bit of, to me, if you overpackage things, you might in fact sort of reduce your TAM and not compete, or like, for example, if we built Azure, in fact, Azure's, you know, it was called Windows Azure.

• 1:02:35Speaker 00

  Right.

• 1:02:35Speaker 01

  Oh, wow, that's a problem, because Azure makes no sense just for Windows. It's sort of got to support Linux as first class. It's got to support MySQL and Postgres as first class. And so that's what sort of allowed us to make sure that you have to, actually have to do a great job with SQL Server.

• 1:02:53Speaker 00

  Yes.

• 1:02:53Speaker 01

  But you've got to do as bang of a job as like, you know, Amazon would do with Postgres or MySQL. And so it was driven primarily by, hey, that's the TAM. That's what customers expect us, and we're going to have tough competition. But, so to me, that's the, that's kind of how I define my modularity.

• 1:03:09Speaker 00

  Yes.

• 1:03:10Speaker 01

  Right? What's the thing that maximizes?

• 1:03:12Speaker 00

  Yes.

• 1:03:13Speaker 01

  My stack's market opportunity? Then, yes, we are a firm, and the reason we're not a conglomerate, and so therefore, there should be a theory of some integration benefits and platform effects.

• 1:03:28Speaker 01

  And so therefore, what is that? And how do we do a great job of it? But each layer of the stack.

• 1:03:33Speaker 00

  Yes.

• 1:03:33Speaker 01

  But even in, let's say in Azure, the token factory. Somebody should be able to come and say, I just want to use Azure for its bare metal services. I just need Kubernetes, you know, clustered all over. But I just need you to do the management part and I'll bring all my software. No problem, we got to win that workload. Maybe then, after that, we'll at least have a shot someday. When it becomes a real pain to manage sort of your multi-region database on your own. Then you'll say, oh, let me just use Cosmos. But it's a separate decision.

• 1:04:00Speaker 00

  But, but isn't there always a debate between if we have Linux on Azure, we'll sell more Azure. But in the Windows, people say, yeah, but you're hamstring, you know, Windows Server. And there are some places, like you're describing, where Microsoft's open. There are other places, you know, Microsoft Flight Simulator is not available on the PlayStation. It's available on the Xbox. And that makes sense, you know, it feels kind of natural to be integrated that way. I know this might be a bit of a stretch, but you know, Teams chat and Teams video are not sold separately. They're just part of one thing. And that makes sense, it makes the bundle more compelling. And so don't you always end up in these debates as to, does the bundling cost outweigh the bundling benefits?

• 1:04:37Speaker 01

  Yeah, I don't think some of those, like, for example, Teams thing is, it's a classic one. Which is Teams was born as a product that brought those four things, like Outlook, right? Outlook was brought, you know, there was a PIM before. There was an email client and a calendaring was separate.

• 1:04:54Speaker 00

  Yes.

• 1:04:54Speaker 01

  And Outlook was the first scaffolding that said, hey, we bring these three things to get a job done, right? So that was, and same thing with Teams, right? We brought chat and channels and video and what have you into one. So the bundling was the product to some degree, right? That was the product scaffolding.

• 1:05:11Speaker 00

  Yes.

• 1:05:12Speaker 01

  And so then, of course, you can then say, hey, that needs to have an open marketplace and it needs to integrate with other things or what have you. So the modularity has to be thought through in ways that make sense at the atomic level.

• 1:05:25Speaker 00

  Yep.

• 1:05:26Speaker 01

  Then you don't want to overthink about the synergies or sort of integration effects. And you're not competitive, right? A classic thing would be if you built an unbelievable public cloud. Except it only ran Windows workloads or SQL workloads, that would be essentially a very small sliver of the market. So it was in our sort of interest and definitely in the interest of meeting the customer needs.

• 1:05:50Speaker 00

  Yes.

• 1:05:50Speaker 01

  And so being able to sort of really click in the AI stack, that's kind of how I look at it, right? We have an infra business, we have an app server business, and we have an apps business.

• 1:05:59Speaker 00

  Yes.

• 1:05:59Speaker 01

  Just simplifying. I want those three things to stand.

• 1:06:03Speaker 00

  Yes.

• 1:06:03Speaker 01

  Uh, for them, their own, on their own, on their own merits.

• 1:06:07Speaker 00

  Yes.

• 1:06:07Speaker 01

  We ourselves, of course, want to have the feedback loop across these three layers. But customers and partners will choose which, where, which door they enter through.

• 1:06:16Speaker 00

  This impression I have is that when you took over Microsoft, you shifted the culture from a highly bundled, you'll buy your Windows machines and they're running Microsoft Access and, you know, every, their SQL Server and everything is like neatly packaged together in this Microsoft life to moving towards more of an open and interoperable strategy.

• 1:06:38Speaker 01

  It's, I think that the way I would say is, my thing was to go back even to the Microsoft of the eighties perhaps, right? Because most of what happened was really in the nineties, there was Microsoft and there was pretty much nothing else.

• 1:06:52Speaker 00

  Yes, yes.

• 1:06:53Speaker 01

  And so there was sort of a lot more of our things coming together, whether it was on the client or on the server. The eighties were, like to your point, right? You know, we built Office on the Mac.

• 1:07:04Speaker 00

  Right.

• 1:07:04Speaker 01

  Windows came later. In fact, the concept that Bill had when he started Microsoft was it's a software factory. I'm not in love with any one category. I'm just like gonna build the best software factory and it's gonna churn out whatever problem. Flight sim, flight sim. You want, you know, a basic interpreter, no problem. We have one. You want an operating system, we have one too. So in some sense, that was the idea. And so, and at one point we got into a lock between four or five parts of that, that became the Windows and Windows NT and client server and what have you. And so I sort of realized that when, you know, I became CEO and even when I was running our cloud business, that hey, this is a time where, you know, the market's going to be a lot bigger and a lot different. And we didn't, we didn't have the mobile platform at that time.

• 1:07:49Speaker 01

  And so therefore we really needed to make sure we would stay relevant in the largest markets that we could address by bringing our products together in configurations that made sense. So it's actually a lot more, less dog, there was not that much dog. In fact, I would say, you know, if it was not in the core DNA of the company. I don't think just because I showed up as a CEO and I said, I want to do this, we would have executed well. It was in the core DNA of the company that we can, in fact, take our software to every platform.

• 1:08:18Speaker 00

  Yes. Speaking of the core DNA of the company, there's the famous cartoon of, you know, Microsoft, all the guns pointing at each other. How much cultural tweaking did you have to do? And how do you actually do that when you get down to brass tacks? Because you can say all the nice things, the all hands and things like that, but ultimately culture comes down to what you will and won't tolerate and how decisions are made and things like that.

• 1:08:44Speaker 01

  Yeah, I'd say there are two things that I learned from that entire episode because I always say, look, I'm a consummate insider, right? Anything good and bad about Microsoft of the last 35 years, I lived through them all and I'm part of it, right? So I can't deny any of it. The thing that I felt was a little bit of that was just we lost our own belief because we lost the narrative. That cartoon is a great example of someone else defining what became the cultural narrative more so than reality.

• 1:09:17Speaker 00

  Yes.

• 1:09:18Speaker 01

  Right? So.

• 1:09:18Speaker 00

  When people started to identify with the cartoon.

• 1:09:20Speaker 01

  That's right. I mean, that's kind of one of the, I think that one of the fundamental issues of today's social media and the zeitgeist is you can absolutely lose narrative.

• 1:09:28Speaker 00

  It's reflexive.

• 1:09:29Speaker 01

  It's, yeah, it's completely reflexive. And it's so like, so one of the interesting things is, of course, all of these things have signal, right? So this doesn't mean, oh, wow, we were all perfect divisions and we were all sort of, you know, in great harmony. That is not the case. But, you know, in some sense, some of these divisional tensions are real issues that need to have tension, right? You can't have, like, this is not about social cohesion is not a goal.

• 1:09:52Speaker 00

  Right.

• 1:09:53Speaker 01

  Winning in the marketplace is a goal. But at some level, you have to orchestrate these large organizations. In fact, you may even have two competing teams by design.

• 1:10:05Speaker 00

  Right.

• 1:10:06Speaker 01

  And just because somebody sort of said, hey, I'm going to read the New Yorker and there's going to be a cartoon, that's a, that's the type of stuff that I think leaders, and how to communicate in today's world where your employees read about you outside and form opinions about you is one of the toughest leadership challenges, I think. Um, which is how do you earn the trust? How do you really make sure that they can, in fact, feel the reality, shape the reality? Like, the other thing is, everybody thinks it's the system. It's that guy at the top, or, you know, my VP, and they have all the power and I have none. The reality is, power is a lot more diffused and distributed.

• 1:10:49Speaker 01

  Um, and so therefore, how do you really help people?

• 1:10:54Speaker 00

  Yes.

• 1:10:55Speaker 01

  Especially get hold of that and reshape, right? Culture, like, you know, one of the other famous things people say is, hey, I never leave companies, I leave managers. And, you know, I believe that, all right? And so it's kind of micro cultures. Um, and they can be shaped. Uh, in fact, when I look back at my Microsoft career, I was lucky to fall into these people who created these unbelievable environments in the company, right? And that's kind of why I stayed, and that's how I thrive.

• 1:11:22Speaker 00

  Yes.

• 1:11:22Speaker 01

  And so to some degree, you know, I feel that the more culture you need at the top, a narrative, then you have to live and be consistent, right? So that's where this growth mindset, or learn it all versus know it all, uh, has been super helpful for us. As just a frame, because nobody thinks of it as my dogma, right? Thank God, it's sort of not, you know, it's a well-understood child psychology thing that appeals to people outside of work. And so cracking something like that and then living it, uh, but also somehow, I would say, the challenge for all of us in today's world is, let the social media memes not define us. What's that inner strength that is there in an organization

• 1:12:07Speaker 01

  that can in fact resist the social meme?

• 1:12:11Speaker 00

  Yes.

• 1:12:11Speaker 01

  Uh, that, I think, is the key.

• 1:12:13Speaker 00

  How many people is Microsoft?

• 1:12:14Speaker 01

  I think around 200,000.

• 1:12:16Speaker 00

  Okay, so, rough numbers, you know, Microsoft is 200,000 people. Stripe is 10,000 people. Maybe there's someone who's listening to this who runs a company that's 500 people or something like that. A lot of the things that we do are probably fairly scale independent, where you're trying to make sure that you're talking to customers, you're holding a leadership offsite, we're looking at the numbers for 26, we want the revenues to be a bit higher and the cost to be a bit lower. You know, there's a lot of activities in companies that are kind of the same regardless of the size. That said, there's also probably things that only show up at the, you know, 200,000 person, you know, city-state size, thus, you know, I wouldn't be aware of the 10,000 person size.

• 1:13:00Speaker 00

  What effects only show up when you're that big?

• 1:13:03Speaker 01

  There are two things I would say. Quite honestly, having only worked at Microsoft, it's not that I'm like an expert, but the one thing I would say, taking over for a founder. Steve and Bill built the company, I mean, Paul and Bill started and Steve and Bill scaled it. And I was sort of the first quote-unquote "non-founder" person. The thing I realized quickly, or in fact, I got into the job and I realized that I need a team. And just to have the ability to manage the scope. But then, you know, that AG Laffley thing that we put out there, which I think is a

• 1:13:45Speaker 01

  great one, like what is this, being clear about what does the CEO clearly need to do though in that, right? Which businesses are you in, which businesses are you out, synthesizing the outside, having the standards, setting the standards for culture. And then the ability, to your point about having that performance culture, that you can't say, "Hey, I'm only about the long term or I'm all over the short term, you've got to deliver both."

• 1:14:08Speaker 00

  Yes.

• 1:14:09Speaker 01

  Getting a real grip of the four or five things that only you can do.

• 1:14:16Speaker 01

  And then building the team, building the team. Uh, you'd say even at a 500 person, that's what you do. But quite frankly, you can keep in your working memory, right? Growing up as a developer, right? There was a set of things everybody would talk about. How many lines of code do you know?

• 1:14:30Speaker 00

  Yes.

• 1:14:30Speaker 01

  Right, personally?

• 1:14:31Speaker 00

  Yeah.

• 1:14:32Speaker 01

  At some point, you sort of say, oh, that's the person who knows that module or that library. That becomes more like, and everybody starts where they know every line of code.

• 1:14:41Speaker 00

  Yes.

• 1:14:42Speaker 01

  At some level, then you have to get to the person who knows. Oh, I know the person who wrote that. Uh, and I think that that modularity.

• 1:14:50Speaker 00

  Yes.

• 1:14:50Speaker 01

  Uh, and team building and the cohesiveness is, I think, the most important.

• 1:14:53Speaker 00

  Am I understanding you correctly that maybe at Stripe scale or at a smaller scale, you can still reason about the product as a product and know everything that you're shipping and everything.

• 1:15:03Speaker 01

  But I also think founders are unique in that sense. Because the founders are, you know, that, that's kind of what is singular about them, right? Because they've grown up with it from day one.

• 1:15:14Speaker 00

  Yes.

• 1:15:15Speaker 01

  See, it's, it's kind of hard to take the working memory of a founder and say, oh, let me take it and imprint it on a sort of a professional CEO.

• 1:15:25Speaker 00

  Yes.

• 1:15:26Speaker 01

  It, it just doesn't work. Uh, because the, even for me, I joined the company in 92. I was not there in the early 80s, right? You know, uh, and so, so to some degree, it was a continuous scale.

• 1:15:39Speaker 00

  Yeah.

• 1:15:40Speaker 01

  Uh, that only the quote unquote, the founder CEO or the founders see it.

• 1:15:45Speaker 00

  Yeah.

• 1:15:45Speaker 01

  Uh, and so that's why I think having respect for what founders can do uniquely and founders having respect for whoever comes next, that they can't be like we doing exactly the same thing that they did, right? So that's why I think this founder mode thing is interesting, which is that clearly there is, you know, the culture personality of a founder is unbelievable, right? And you use it, maximize it. Then mere mortal CEOs like us have to sort of also be, you know, you can sort of be in the re-founder mode, but don't think you're a founder.

• 1:16:15Speaker 00

  Mm-hmm.

• 1:16:16Speaker 01

  And that, that nuance, uh, I think is an important one.

• 1:16:20Speaker 00

  Last question, um, we're running up against time as we, um. As we talk about cultures and building them, what's going on in the water in Hyderabad for, you know, the school that you went to? Also, Shantanu went there, A.J. Banga went there. A bunch of good chess players are similarly from there and southern India more broadly and things like that. But do you have any theory on the local outperformance?

• 1:16:50Speaker 01

  Yeah, the high school we went to, in fact, yeah, until I would say Nvidia and Jensen, because Jensen has it now covered for all of us. For, yeah, between me and A.J. and Shantanu. In fact, the CEO of Procter and Gamble was my, today is also from my high school.

• 1:17:08Speaker 00

  See, it's a cabal.

• 1:17:09Speaker 01

  It's kind of a cabal. I would say that one of the fascinating things growing up in Hyderabad and going to that school in the middle of nowhere at that time, in the late 70s and the early 80s, I would say, I think it gave us a lot more space. If you look at even each of us, right? Academics was a thing, but quite frankly, we mostly, all of us had things which were, we excelled at a lot of other things beyond academics, in fact. That was a pretty rare thing at that time in that country. And so I attribute it a lot to my high school because I feel that it is a place where it gave us a lot more space and room

• 1:17:50Speaker 01

  to follow what really became your passion, but you were able to take your time to discover it versus sort of feeling that, hey, I had to join some kind of a race.

• 1:18:02Speaker 00

  It wasn't those tractors.

• 1:18:03Speaker 01

  That's right.

• 1:18:04Speaker 00

  What was your passion in high school?

• 1:18:05Speaker 01

  Cricket. In fact, this, by the way, yeah, the Samuel Beckett.

• 1:18:09Speaker 00

  Yeah, so I want to know this story.

• 1:18:10Speaker 01

  Sure, you know, who, so if you asked the question, who is the one sports person who played actually professionally? I guess he played one or two matches for the, I guess, Dublin University and he played first-class cricket. And so he's the only person who played professional cricket and won a Nobel Prize.

• 1:18:28Speaker 00

  Really? That's really funny. So you can have it all as the chessboxing of its day or something, you know?

• 1:18:37Speaker 01

  A Nobel Prize-winning professional cricketer.

• 1:18:39Speaker 00

  That's awesome. Well, you, you know, you, you came close, but in another life, you know, that could have been you.

• 1:18:46Speaker 01

  Thank you so much.

• 1:18:47Speaker 00

  Thanks, Saj.

• 1:18:47Speaker 01

  It's such a pleasure.