Instead, he recommended that businesses should make sure they retain all the data on how employees use AI tools so they can eventually train or fine-tune their own open-weight model. This can be accomplished by using AI gateways, which serve as a protective intermediary.
“Any firm that doesn’t have this control, I will claim will not remain a firm because you’ve essentially outsourced your thinking,” Nadella said on an episode of CNN‘s Fareed Zakaria GPS, as spotted by TechCrunch.
That’s a striking claim — and an ironic one, since outsourcing your thinking is arguably exactly the point of using AI, of which Microsoft is a leading vendor. Nadella, in a nutshell, is saying that heavily relying on proprietary AI software could also be a company’s undoing.
He may have an angle in pushing these claims, though. Microsoft hosts the cloud infrastructure that businesses can run their open weight models on. The more people run to hosting their own models, the better for its bottom line.
There’s been a lot of hype lately around open-weight models as a cheaper alternative to those offered by the top AI labs. In AI, “weights” are the numerical values that determine how a model processes information. The models are “open” because these weights are publicly accessible and free to download.
Agentic AI tools like Anthropic’s Claude Code, by contrast, are closed-source. They also come in a “harness,” which is essentially the software the underlying model is couched in. Nadella thinks companies should ditch AI harnesses and instead use a custom AI platform that allows you to recruit multiple AI models — like a cheaper, open-weight one.
Microsoft is having a solid year when it comes to finances. After investing billions of dollars in infrastructure and its cloud business, the tech giant reported stronger-than-expected figures. Microsoft’s core cloud business, Azure crossing $100 billion in revenue for the first time. Now, Microsoft CEO Satya Nadella has announced that the company will soon launch an AI super app as it takes on the likes of OpenAI and Anthropic.
Satya Nadella revealed that Microsoft was becoming more independent when it comes to AI models along with its own chips. "That's really the enterprise design architecture that we are going to evangelise. We ourselves are using it," Nadella said. Microsoft previously relied on OpenAI for core AI models when it came to products like Copilot. The company was an early investor in the AI startup, and retains an equity stake.
Microsoft stated that Copilot adoption has risen. Paid seats for M365 Copilot had crossed 30 million, up from 20 million in the previous quarter
During the earnings report, Microsoft stated that its free cash flow stood at $19.6 billion. This was above analysts' estimate of $13.44 billion, but down 23 per cent from a year earlier.
“By keeping the harness separate from the model and the context and memory separate from the model, you absolutely can use multiple models for what they’re great at,” Nadella said in the interview, per TechCrunch. “At the same time, any one model can go away, and you can still continue to be in control of your own destiny.”
“To some degree there’s got to be some value exchange in the consumer space where you’re getting something for free, maybe for your data,” he mused. “That’s sort of how the advertising business model has worked.”