Microsoft CEO Satya Nadella Urges Smarter AI Use

Microsoft CEO Satya Nadella is asking the company's employees to be smarter about their use of artificial intelligence (AI).

The chief executive of the software giant believes not every problem requires the most advanced AI models, even as AI tools become increasingly embedded in daily workflows across the company.

Speaking during a live taping of The New York Times' "Hard Fork" podcast, Nadella acknowledged that AI usage inside Microsoft has grown significantly, joking that he is also part of the trend.

When asked about how much "tokenmaxxing" was happening at Microsoft, Nadella said, "A lot."

He added, "I'm a tokenmaxxer too, it's addictive. But you have to step back when the novelty wears off to say, 'What is it that I'm trying to create?'"

Nadella’s comments come as technology companies continue encouraging employees to adopt AI tools for coding, writing, research, and productivity tasks.

However, Nadella said the focus should be on using the right AI model for the right task rather than defaulting to the most powerful systems available.

Referring to Microsoft's approach of matching tasks with appropriate AI models, he said, “don't use frontier models for non-frontier problems.”

“Let's kind of match these things such that you get the outputs, you get the economics — it can't be a race to doing things that just don't add value,” Nadella noted.

What Microsoft CEO Satya Nadella said about practical AI use

According to Nadella, employees should focus on the outcomes they are trying to achieve rather than simply increasing AI usage metrics.

He pointed to Microsoft Copilot's Auto Mode as an example of how AI systems can automatically select the most suitable model for a specific task, helping balance performance and computing costs.

The Microsoft chief also shared an example of how he personally uses AI in software development.

Nadella said he recently used AI tools to create a system that automatically keeps a software project up to date based on conversations taking place in the workplace.

According to him, if employees discuss project changes, the AI can generate a plan, make the required updates, and ensure the software continues to work correctly without requiring him to participate directly in every meeting or message thread.

Nadella's comments come as Microsoft continues reshaping its business around AI.

Over the past year, the company has made several leadership changes aimed at accelerating its AI strategy.

In October, Nadella appointed a new CEO for Microsoft's commercial business, allowing him to spend more time on technical and product-focused work.

The following month, Microsoft also brought in a new AI advisor to help rethink parts of the company's business model for the AI era.

The discussion also touched on Microsoft's close relationship with OpenAI.

During the event, one of the podcast's co-hosts presented Nadella with a T-shirt bearing the words "Microsoft Advanced AI Research."

The co-host said that the shirt had been created in 2023 during the brief period when OpenAI CEO Sam Altman was removed from his position, and Microsoft was reportedly preparing plans for a new AI lab that could potentially house OpenAI employees.

However, Altman returned to OpenAI a few days later, and the proposed lab was never launched.

Nadella accepted the T-shirt with a laugh.