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Satya Nadella illustration

Introduction

Microsoft’s all-in moment on artificial intelligence has been defined by billions in spending and a C.E.O. counting on technology with huge potential and huge risks.

Surprising Deal

Earlier this year, Satya Nadella hammered out a deal that surprised everyone outside his inner circle at Microsoft. Mr. Nadella, Microsoft’s chief executive, had his eyes on a Silicon Valley start-up called Inflection AI. The company’s chief executive, Mustafa Suleyman, was one of the founders of the pioneering artificial intelligence company DeepMind. He had raised more than $1.5 billion in funding and hired top researchers for his new company, but he had a not-so-great reputation as a boss. Inflection also didn’t seem to make any money.

Microsoft still shelled out more than $650 million to license Inflection’s technology, hired most of its staff and put Mr. Suleyman in charge of a more than $12 billion chunk of Microsoft’s business. It was, to put it mildly, risky.

Risky Bets

Risky bets on A.I. have become a habit for Mr. Nadella. Over the past five years, he has committed to investing $13 billion in another aggressive young company called OpenAI, even though it hadn’t yet made much money. And he told all of his lieutenants to find ways to build A.I. into Microsoft’s many, many products, even though the technology didn’t always work correctly.

Satya Nadella on stage

Satya Nadella’s bets on A.I. have helped push Microsoft’s value up more than 70 percent over the last two years. Credit: Grant Hindsley for The New York Times

Conclusion

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