Satya Nadella on Microsoft's agent bet and AI’s trust problem

Microsoft CEO Satya Nadella unveiled a new Copilot and Autopilot, an agent built on a hardened version of OpenClaw that gets its own computer, workspace, and memory to work continuously on a user's behalf, and said Autopilot should extend to the consumer side, where Microsoft has more than 100 million consumer subscribers. Nadella said Microsoft's own frontier models are already used in Copilot's Auto mode while Copilot will keep offering other labs' models, arguing "You can't have one model," and predicted enterprise agents will make that market bigger than cloud "by orders of magnitude." He also criticized the AI industry as "way too self-obsessed," raised concerns about agents acting deceptively, and said he does not want AI oversight to become a "cartel-like arrangement.

I recently sat down with Microsoft CEO Satya Nadella in Seattle for the unveiling of the new Copilot. We discuss Autopilot, Microsoft’s new OpenClaw-based agent that can work on your behalf, and why he thinks newer AI models are finally capable of delivering on more of Copilot’s promise. Nadella also has a blunt assessment of the AI industry: “We are way too self-obsessed.” I ask him why the industry has struggled to explain its benefits and what it will take to earn people’s trust. We get into his concerns about agents acting deceptively, when a safety problem should stop a release, and why he doesn’t want AI oversight to become a “cartel-like arrangement.” We also discuss Microsoft’s relationship with OpenAI, the models Microsoft is building itself, and why Nadella wants investors to think about its apps, agents, and infrastructure as one connected business. He explains how he uses AI to track Microsoft’s capital spending, shares his vision for “unmetered intelligence” on Windows, and gives an update on Xbox’s path back to growth. Sources is available wherever you get podcasts https://podcast.sources.news/ , including video or audio on YouTube https://www.youtube.com/@sourcespod and Spotify https://open.spotify.com/show/3p1KZvkbdx96VgFh8dP8Ao , and audio on Apple Podcasts https://podcasts.apple.com/us/podcast/sources-with-alex-heath/id1840154537 . Thanks to the show’s premiere sponsors: Atlassian, Granola, and Mercury. A MESSAGE FROM MY SPONSOR AI shouldn’t dictate where your models run. Run the models you want, securely, wherever they make the most sense. Across clouds, data centers and the edge, VAST Data is extending its AI Operating System to give organizations control over model choice, placement, access, and cost. Nadella highlights - He wants to bring Autopilot’s AI chief of staff to your personal life, too. Built on a hardened version of OpenClaw, the agent gets its own computer, workspace, and memory to work continuously. When I ask about Microsoft’s consumer strategy, he points to its 100 million-plus consumer subscribers: “Autopilot should also go to the consumer side.” He sees consumer agents potentially cutting out today’s middlemen, making that market more zero-sum. In the enterprise, he thinks agents will make the market bigger than cloud “by orders of magnitude.” - He thinks the AI industry is too self-obsessed to explain why anyone else should care. “I think we are way too self-obsessed as an industry about, look at us, how glorious we are,” he tells me. His prescription is to let the people using AI speak to its benefits and demonstrate that it creates economic opportunity for workers and the communities hosting data centers. More pronouncements from tech CEOs won’t do it: “Any amount that I say or any one of us say is not good enough anymore, I feel.” - Microsoft wants its own frontier models and to serve all the others. Nadella says Microsoft’s models are already being used in Copilot’s Auto mode, and its frontier ambitions are tied to its own data and customer needs. He also makes the economic case for competition: “You can’t have one model,” he says, warning about where token pricing would end up. Microsoft intends to keep supporting other labs as it develops its own models: “Copilot will still have all the other models, because customers will expect that.” ICYMI Sources is a podcast and newsletter by Alex Heath about the AI race, featuring conversations with leading founders and technologists. Every week, Sources reaches the inboxes of thousands of decision-makers https://sources.news/about in tech, finance, policy, and media.