News Microsoft CEO says there is an 'overbuild' of AI systems, dismisses AGI milestones as show of progress

[Admin]

Microsoft CEO Satya Nadella said in an interview that there is AI hardware overbuild and that his company would be lease capacity from competitors in the future.

Microsoft CEO says there is an 'overbuild' of AI systems, dismisses AGI milestones as show of progress : Read more

 

[SonoraTechnical]

from the artcle, Satya:
“The real benchmark is the world growing at 10%.”

An entire world economy based on never ending growth in a world of finite resources and space.... What could go wrong?

 

[hotaru251]

The only thing that’s going to happen with all the compute build is the prices are going to come down.”

Given the $ this guy makes he likely hasn't notcied, but prices never go down when ai is involved.

 

[vanadiel007]

He must mean like the growth of Microsoft over the years has allowed prices to come down for products like Windows, Office etc...

Yes, I understand now.

 

[why_wolf]

I think he means stock market growth of 10%, not real world growth. Since the growth potential of AI is entirely from the promise that you can fire all your human workers and keep their paychecks.

 

[vanadiel007]

I think he means stock market growth of 10%, not real world growth. Since the growth potential of AI is entirely from the promise that you can fire all your human workers and keep their paychecks.

Then nobody would have money to purchase any products and the world will come to a standstill.
This is all mostly about cost cutting, not about improving human life.

 

[why_wolf]

Then nobody would have money to purchase any products and the world will come to a standstill.
This is all mostly about cost cutting, not about improving human life.

Yes but that's the next CEO's problem. Nadella will bail out before his actions finally harm the stock price.

 

[JTWrenn]

Microsoft CEO Satya Nadella said in an interview that there is AI hardware overbuild and that his company would be lease capacity from competitors in the future.

Microsoft CEO says there is an 'overbuild' of AI systems, dismisses AGI milestones as show of progress : Read more

No he didn't. He said there will be an overbuild. Ie we haven't overbuilt yet...right? He never said there IS an overbuild, or that we have already overbuilt.

"However, he also said that “there will be an overbuild” and that “it’s not just companies deploying, countries are going to deploy capital”. "

I know it's a small difference in the wording, but it is a very big difference in the meaning.

 

[JRStern]

No he didn't. He said there will be an overbuild. Ie we haven't overbuilt yet...right? He never said there IS an overbuild, or that we have already overbuilt.

"However, he also said that “there will be an overbuild” and that “it’s not just companies deploying, countries are going to deploy capital”. "

I know it's a small difference in the wording, but it is a very big difference in the meaning.

@21:41

Yes, that's what he said. And yet in the whole discussion he's pushing back on the idea that the pot is soooo big he ought to "invest" absolutely as fast and as much as possible. So the "overbuild" thought is on his mind now. Maybe it's not there yet - and maybe it is. But the plans already in progress probably do comprise some overbuild, if you ask me. There are technical reasons for this already known to Microsoft - three years ago! Training with cleaner data runs exponentially faster. And breaking a monolithic model into parts seems to work, cutting back on exponential costs. And new chips are "20x faster" if you believe NVidia at least when running FP4. And then on top of that: DeepSeek!

I think 2025 is the year "overbuilt" becomes a reality.

The simple thought of "more compute wins" and that "scale is all you need", was never what you call credible.

And in software, a given level of function tends to get exponentially cheaper over a several-year period, both hardware and software algorithms tend to improve and their product improves bigly.

 

[JRStern]

Nadella comes across as very smart, for a CEO, LOL.
But he's completely snowed by the Majorana thang.

 

[philonous]

However, he pointed out that supply and demand must have some equilibrium, and that he’s tracking both sides of the equation. He said that you have to have proof that initial investments in AI hardware would translate into demand, ensuring that you can reinvest your capital.

Microsoft is doing the sensible thing again and copying Apple: go slow, figure out what people want. Of course, Nadella is taking this route after being hammered by rampant AI costs with no associated benefits now or in the future for two quarters. Raising rates on MS Office will only slightly offset the massive hits Microsoft is taking because of its gross overspend in AI. I estimate about 5 years for Microsoft to recover from these losses.

I'm an Apple shareholder because they are the best damn business people in the world. They will not do anything unless they know there is a buck in it; nay, ten bucks. Microsoft has always used its monopoly power to emulate the pioneers: Apple in GUI, Amazon in cloud computing, and Lotus in office productivity. Every time Microsoft has tried to create a new marketplace, it has failed miserably, and its AI venture is another perfect example of their persistent failure to understand how markets for new technology work.

Even with a $3T valuation they still can't design a human-friendly GUI, especially in Microsoft Office products, even after moving closer and closer to MacOS GUI with windows 11.

 

[Klmip]

Microsoft is doing the sensible thing again and copying Apple: go slow, figure out what people want. Of course, Nadella is taking this route after being hammered by rampant AI costs with no associated benefits now or in the future for two quarters. Raising rates on MS Office will only slightly offset the massive hits Microsoft is taking because of its gross overspend in AI. I estimate about 5 years for Microsoft to recover from these losses.

I'm an Apple shareholder because they are the best damn business people in the world. They will not do anything unless they know there is a buck in it; nay, ten bucks. Microsoft has always used its monopoly power to emulate the pioneers: Apple in GUI, Amazon in cloud computing, and Lotus in office productivity. Every time Microsoft has tried to create a new marketplace, it has failed miserably, and its AI venture is another perfect example of their persistent failure to understand how markets for new technology work.

Even with a $3T valuation they still can't design a human-friendly GUI, especially in Microsoft Office products, even after moving closer and closer to MacOS GUI with windows 11.

Sorry but Apple is now a joke. No new products last year, failed ski goggles the year before, declining market share on core products due to yearly incremental upgrades, no meaningful AI presence. No wonder Buffet sold half his shares last here.

 

[A Stoner]

from the artcle, Satya:
“The real benchmark is the world growing at 10%.”

An entire world economy based on never ending growth in a world of finite resources and space.... What could go wrong?

While resources are finite, the size and scope of the resources compared to our true usage of them is microscopic in the true scheme of things. Growth includes expanded capability in extraction, usage and recoverability.

3,000 lb cars of today are more durable, better performing, more efficient than 6,000 lb cars of the 50s. With Elon Musk, we will maybe come to have nearly inexhaustable access to metals from the asteroid belt. Who knows what 50 years will bring us to. With 10% instead of 3% growth, our ability to do things will only expand.

 

[philonous]

Sorry but Apple is now a joke. No new products last year, failed ski goggles the year before, declining market share on core products due to yearly incremental upgrades, no meaningful AI presence. No wonder Buffet sold half his shares last here.

Not sure you caught the gist of what I said. Not having a big AI presence is a good thing! Microsoft is taking a major bath on AI. Nadella is admitting as much when he says euphemistically that he wants to avoid overbuilding. He's admitting that AI was a bad bet, and their stock price has hurt as much. Apple's stock price has gone up because they didn't waste too much money on AI.

What does the fact that Apple and Microsoft stock prices are going in opposite directions (MSFT is down) tell you?

 

[SonoraTechnical]

While resources are finite, the size and scope of the resources compared to our true usage of them is microscopic in the true scheme of things. Growth includes expanded capability in extraction, usage and recoverability.

3,000 lb cars of today are more durable, better performing, more efficient than 6,000 lb cars of the 50s. With Elon Musk, we will maybe come to have nearly inexhaustable access to metals from the asteroid belt. Who knows what 50 years will bring us to. With 10% instead of 3% growth, our ability to do things will only expand.

Your faith is impressive....

 

[SonoraTechnical]

Sorry but Apple is now a joke. No new products last year, failed ski goggles the year before, declining market share on core products due to yearly incremental upgrades, no meaningful AI presence. No wonder Buffet sold half his shares last here.

(I'm in Mexico at the moment, so Google insist on pesos...just nominally divide by 20 or so to get USD)

Market Summary > Apple Inc
5,052.54 MXN+1,949.19 (62.81%)past year
If Buffet sold a year ago.. he left a 62% increase on the table...

Market Summary > Apple Inc
5,052.54 MXN+696.60 (15.99%)past 6 months
if he sold six months ago... he left a 16% increase on the table...

Always felt Tim Cook was more of a caretaker CEO.... but he has overseen four generations of their own M series processors powering their devices, which was just in the dream stages for Steve.

That said, I'm impressed with how many folks are buying those apple watches.... and now they're going to be buying rings.... crazy...but man are they tapped into the consumer market freely liberating folks of their disposable income...

I wouldn't count Apple out yet... (Disclaimer: I own no apple devices and subscribe to no apple services... However, I am in awe of what they are able to accomplish)