July 20, 2024
How OpenAI and Microsoft reawakened a sleeping software giant


Just a decade ago, the world’s biggest tech beast was a relative minnow. Microsoft had become notorious for disappointing product launches, stagnant innovation, and losing top talent. The first true software giant was becoming a big tech dinosaur.

Fast forward to 2024 and Microsoft is the planet’s most valuable business. Under the leadership of CEO Satya Nadella, stock has soared by over 1,000% in 10 years. In January, the company reached a $3 trillion market cap — larger than the whole GDP of France.

At the heart of the comeback is artificial intelligence. Microsoft has embedded AI across the Azure cloud computing platform, the Office productivity suite, and the Bing search engine. After missing out on the mobile and social media booms, the Redmond giant has become a global leader in AI.

A key player in the turnaround was Sophia Velastegui — one of the star speakers at TNW Conference this June. Velastegui joined Microsoft in 2017 as a general manager of AI Products and Search. Six months later, Business Insider named her one of the most powerful female engineers in tech.

Back then, Nadella’s plans were just starting to take shape.

Microsoft was not an AI company — it was a software company. But if you talk about Microsoft now, many people will say it’s an AI company,” Velastegui, now Chief Product Officer of automotive giant Aptiv, tells TNW.

“How did they do that? What are the things they did? They invested in and infused AI into their features and their products —whether it be for software development or Office.”

Velastegui played a growing role in that infusion. After a promotion to Chief AI Officer in Business Applications, she became part of the core team exploring Microsoft’s vaunted new investment: OpenAI.

An intergenerational relationship

Microsoft has a long history in AI. The company’s research unit had explored the field since Bill Gates launched the centre in 1991 — but the experiments hadn’t spawned popular products. From the reviled Clippy to the jilted Cortana, Microsoft’s AI apps rarely charmed consumers.

Nadella immediately sought to change that. His first big move after he was appointed CEO in 2014 was a sweeping embrace of chatbots. The shift wasn’t an immediate triumph: an early bot called Tay became a Hitler-loving sex pest

Despite the controversy, the plans rolled on.

“As an industry, we are on the cusp of a new frontier that pairs the power of natural human language with advanced machine intelligence,” Nadella said after Tay’s meltdown.

As a company, Microsoft looked beyond its walls for that frontier. The search led the company to OpenAI.

Satya Nadella in 2014