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  • Rhaxapopouetl@ttrpg.networktoTechnology@beehaw.org•Microsoft CEO Admits That AI Is Generating Basically No Value
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    5 months ago

    Victor Tangermann February 22, 2025 3 min read

    Microsoft CEO Satya Nadella, whose company has invested billions of dollars in ChatGPT maker OpenAI, has had it with the constant hype surrounding AI.

    During an appearance on podcaster Dwarkesh Patel’s show this week, Nadella offered a reality check.

    “Us self-claiming some [artificial general intelligence] milestone, that’s just nonsensical benchmark hacking to me,” Nadella told Patel.

    Instead, the CEO argued that we should be looking at whether AI is generating real-world value instead of mindlessly running after fantastical ideas like AGI.

    To Nadella, the proof is in the pudding. If AI actually has economic potential, he argued, it’ll be clear when it starts generating measurable value.

    “So, the first thing that we all have to do is, when we say this is like the Industrial Revolution, let’s have that Industrial Revolution type of growth,” he said.

    “The real benchmark is: the world growing at 10 percent,” he added. “Suddenly productivity goes up and the economy is growing at a faster rate. When that happens, we’ll be fine as an industry.”

    Needless to say, we haven’t seen anything like that yet. OpenAI’s top AI agent — the tech that people like OpenAI CEO Sam Altman say is poised to upend the economy — still moves at a snail’s pace and requires constant supervision.

    So Nadella’s line of thinking is surprisingly down-to-Earth. Besides pushing back against the hype surrounding artificial general intelligence — the realization of which OpenAI has made its number one priority — Nadella is admitting that generative AI simply hasn’t generated much value so far.

    As of right now, the economy isn’t showing much sign of acceleration, and certainly not because of an army of AI agents. And whether it’s truly a question of “when” — not “if,” as he claims — remains a hotly debated subject.

    There’s a lot of money on the line, with tech companies including Microsoft and OpenAI pouring hundreds of billions of dollars into AI.

    Chinese AI startup DeepSeek really tested the resolve of investors earlier this year by demonstrating that its cutting-edge reasoning model, dubbed R1, could keep up with the competition, but at a tiny fraction of the price. The company ended up punching a $1 trillion hole in the industry after triggering a massive selloff.

    Then there are nagging technical shortcomings plaguing the current crop of AI tools, from constant “hallucinations” that make it an ill fit for any critical functions to cybersecurity concerns.

    Nadella’s podcast appearance could be seen as a way for Microsoft to temper some sky-high expectations, calling for a more rational, real-world approach to measure success.

    At the same time, his actions tell a strikingly different story. Microsoft has invested $12 billion in OpenAI and has signed on to president Donald Trump’s $500-billion Stargate project alongside OpenAI CEO Sam Altman.

    After multi-hyphenate billionaire Elon Musk questioned whether Altman had secured the funds, Nadella appeared to stand entirely behind the initiative.

    “All I know is I’m good for my $80 billion,” he told CNBC last month in response to Musk’s accusations.