The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
00:17:09 · Satya Nadella, Harry Stebbings
[00:17:09] S0: Yeah. That's a great point. [00:17:10] S1: Yeah. And I wish I'd known it twelve months ago. I would've done some very different investing. Speaking of that, we've had, like, Mustafa Silliman saying training runs of a 100,000,000,000 are coming, and only a handful of labs can pay for that. A $100,000,000,000 training runs. Do we have the energy infrastructure and power to enable this scale across the stack, but especially when we Yeah.
00:17:32 · Satya Nadella
[00:17:32] S0: I mean, the way I come at it is, ultimately, it has to come from the world GDP inflecting and then that allowing someone to then have as a percentage of R and D, right? Because when somebody says training run, it's just a percentage of R and D, right? Companies that are heavy in R and D spend what? 15, 20% on R and D. And so therefore, yeah, at some point, if you have enough revenue, you can spend enough on training. And then, of course, you'll have enough revenue if you're contributing to the world economy growing so that you can get your fair share, so to speak. And then you also bring up the other side, which is the supply side, which is we have power shortages, we have silicon shortages, we have all kinds of things today. They're long lead items. You just can't snap your finger and have power generation, or you can't have a new fab. And so now, interestingly enough, given the demand everyone's building, and so the question is, when will all of this come online? What will be the demand supply? No one knows. Quite frankly, any one of us who are sitting here today will just be speculating. But my feeling is that if you start by thinking of the stable state would be just like today. Right? Income statements are suddenly not going to be different for a company. It's going to be, Hey, I have some revenue. I have some cost of revenue and I have to have some profit. And if that is going to be true, then the question is, what is the world GDP growth rate? That's the bigger thing for me.
00:18:55 · Harry Stebbings, Satya Nadella
[00:18:55] S1: In terms of the inflation of GDP growth rate, the world has kinda stabilized 2% a year for a very large amount of time. Does AI have the ability to to seriously inflect that in a short amount of time? [00:19:06] S0: I think so, and I somewhat hope so because that is the point. Let's take even as a percentage of any of our GDPs, the amount of money we spend in our healthcare. So that's why I look at even the deployment of Copilot in NHS and say, Wow, if it can improve patient outcomes and reduce cost in the healthcare, that is by definition helping the GDP of The United Kingdom. And so I think that there are these pockets of the economy which are ripe for adoption of AI. Really, in fact, there's the least amount of displacement, the most amount of benefit. And so that, I think, is where I think we'll have to find the best fit. Software development is another one, right? It's fascinating to see how much the demand is elastic for software development, right? That means the IT backlogs were huge, none of us even recognized it. [00:20:03] S1: Exactly. I was taught that you had to be the top one or two in a market to win in venture. We're in, you know, factory, which is fifth, and it's winning. Fifth. Yeah. This breaks all rules of venture. The question that I have, again, slightly naughty, not on schedule, but it's just like, will we see the tipping in terms of capability advancement in alternative functions, finance, sales, marketing, that we've seen in coding? Because coding's been the mother lode.
00:20:03 · Harry Stebbings, Satya Nadella
[00:20:03] S1: Exactly. I was taught that you had to be the top one or two in a market to win in venture. We're in, you know, factory, which is fifth, and it's winning. Fifth. Yeah. This breaks all rules of venture. The question that I have, again, slightly naughty, not on schedule, but it's just like, will we see the tipping in terms of capability advancement in alternative functions, finance, sales, marketing, that we've seen in coding? Because coding's been the mother lode. [00:20:26] S0: I think that that's a good point. It it... People talk a lot about, you know, Do you have a verifiable reward? And it's easy to do these. Because a lot of the magic has been RL on top of these pre trained models. That is what has helped coding. Can we crack that in knowledge work? Seems much harder. But again, all the examples I talked about, sort of in contact centers, in the supply chain systems, in these marketingcash to order systems, I think it's possible, and we're seeing it. Is the demand as elastic as coding? I think science may be as elastic, right, or engineering in general. Like, by the way, if I look at even what's happening inside, not just in software development, let's take silicon development, that's another thing that's going through a radical shift, Your ability to tape out much faster, simulate everything in silico is much better. Your first spin can completely come out. [00:21:20] S1: But even just like optimization of maintenance reports, like you said with Rolls Royce, which I would never consider.
00:21:20 · Harry Stebbings, Satya Nadella
[00:21:20] S1: But even just like optimization of maintenance reports, like you said with Rolls Royce, which I would never consider. [00:21:25] S0: It's unbelievable. Like, I mean, it's a thing that they've been dealing with forever, just scheduled maintenance, and I had not realized that, wow, that's a big optimization problem that you can go now run. So I've I've watched, yeah, many, many [00:21:36] S1: of your shows, and we're gonna do a quick fire round. Yep. And people haven't asked some of these questions, which I've always wanted to know, and I think everyone wants to know, but, yeah, people haven't asked them. What's the exercise routine given the travel schedule, Satya? [00:21:48] S0: Well, I mean, you're in good shape. Well, I I try to be. I don't know whether it's all well hidden. But, you know, the one thing I've gotten into the habit, you know, this has been about maybe twenty five years even on, which is every morning I get up and, you know, I used to be able to run. Unfortunately, my knees have gone away. And so now at least least I walk with incline. Even this morning, I was able to get a half hour in. And so that's what... In spite of any jet lag, wherever I am, I get hit the gym every day. I do have bad news. [00:22:17] S1: It's my age as well. What have you changed your mind on in the last twelve months?
00:22:17 · Harry Stebbings, Satya Nadella
[00:22:17] S1: It's my age as well. What have you changed your mind on in the last twelve months? [00:22:21] S0: It might be because after all, I was one of the first... Obviously, when Dario and Ilya and Sam and Greg and Elon were all, I guess, one happy family, they were really the believers in scaling laws. That's what I believed in back in 2018, 2019. And I think the biggest change now I have is I used to always think that alignment will just fall out. I no longer believe that. So I think this alignment thing may be a harder, different problem. And so, yeah, that's the one thing I've changed my mind on. [00:22:52] S1: What looks crazy today but will be incredibly common and accepted in five years? [00:22:57] S0: You know, it might be that that thing that we just talked about, those evals. Right? Which, what is a firm? I think a firm would be an an AI benchmark. [00:23:05] S1: Final one for you. There are many things to be excited about over the next ten years, for you specifically. Like, for me, it's, my mother's got MS. I'm so excited for the drug development that could be capable. What are you most excited for?