The Ledger
Every statement that passed quotation and attribution checks. Mix any filter with any other: certainty 1/5, debate potential 5/5, or both at once.
why aren't all 96 resolved? a statement only gets an assessment when the public record can support or contradict it. opinions and what-ifs never can, and 0 checkable ones are still open, waiting for their date. predictions held up or didn't; assertions are supported or contradicted. on every card: ▮▮▮▮▮ certainty · ▮▮▮▮▮ debate potential. speakers are clickable
Nadella: Microsoft refused OpenAI requests for dedicated multi-gigawatt compute clusters
“Sometimes you may have to say no to some of the demand, including some of the open AI demand, right? Because sometimes, you know, Sam may say, hey, build me a dedicated, you know, big, you know, whatever, multi-gigawatt data center in one location for training…”
Nadella: Microsoft's bottleneck is power and warm shells, not chip supply
“Quite frankly, the biggest issue we are now having is not a compute blood, but it's a power, and it's sort of the ability to get the bills done fast enough close to power. So if you can't do that, you may actually have a bunch of chips sitting in inventory tha…”
Nadella confirms Microsoft owns approximately 27% of OpenAI on diluted basis
“Yeah, it does. But I would say before even our stake in it, Brad, I think what's pretty unique about OpenAI is the fact that as part of OpenAI's process of restructuring, one of the largest nonprofit gets created.”
Nadella: Microsoft's $13.5B OpenAI investment was equity, not booked as Azure revenue
“Our investment of let's say that 13 and a half, which was all the training investment, that was not booked as revenue. That is the reason why we have the equity percentage. That's the reason why we have the 27% or a hundred and thirty-five billion. So that was…”
Gurley: Microsoft's OpenAI deal uses cloud credits to create cashless revenue
“It started with the original, from my perspective, with the original Microsoft open AI deal where credits go in as A in kind investment. And then those credits are used back against, you know, Azure and Microsoft cloud services. And in the, in that case, you k…”
Patel: Meta and Microsoft may take free cash flows close to zero
“I think Meta and Microsoft may even take their free cash flows close to zero and just spent.”
Nadella expects AI to lower total people costs while raising cost per head
“So I think headcount will, in fact, one of the ways I look at it and say is our total people costs will go down, our cost per head will go up, And my GPU per researcher will go up.”
Gerstner: Blocking Big Tech From Small M&A Harms the Country
“We need to get back to a place where, you know, Microsoft and Google can go buy, you know, a company that's de minimis relative to their size. You know, Amazon can buy vacuum cleaner company, you know, iRobot without, you know phalanxes of lawyers and having t…”
Gerstner: OpenAI Should Rename to ChatGPT and Focus on Google
“If I was Sam Altman running OpenAI, I think I might rename the company ChatGPT and just focused on the multi-trillion dollar opportunity to replace Google, right? Because I think winning at both, beating Google at consumer and beating Microsoft at enterprise y…”
Gurley: Cloud Revenue From Invested AI Credits Is 'Low Quality'
“From the big company player side, I would just say definitively, And this could get me in trouble, but this is low quality revenue. Like, this is flat out low quality revenue, and I'm certain that they've got their auditor to sign off on it, but I don't think …”
Nadella: Microsoft has royalty-free access to OpenAI IP for seven years
“Not only we have the exclusivity of the model in Azure, but we have access to the IP. I mean, having a royalty free, let's even forgetting all the know how and the knowledge side of it, but having royalty free access all the way till seven more years gives us …”
Nadella: Bill Gates was skeptical of Microsoft's initial $1B OpenAI investment
“Obviously you go to the board and say, hey, I have an idea of taking a billion dollars and giving it to this crazy structure, which we don't even kind of understand. What is it? It's a nonprofit, blah, blah, blah. And saying, go for it. There was a debate. Bil…”
Nadella: Hyperscalers will run heterogeneous hardware fleets across multiple chipmakers
“And it's not, and by the way, it's going to be heterogeneous. Obviously, Jensen's super competitive. Lisa is going to come. You know, Hawk's going to produce things from Broadcom. We will all do our own. So, there's going to be a combination. So, you want to r…”
Nadella: Copilot Suite Is Microsoft's True High-Margin Business Over Azure
“Some of times our investors are overly fixated on the Azure number. But remember, for me, the high margin business for me is co-pilot. It is security co-pilot. It's GitHub co-pilot. It's the healthcare co-pilot. So we want to make sure we have a balanced way t…”
Altman: OpenAI would still rely on Microsoft distribution even with superintelligence
“Brad, to say the obvious, if we had super intelligence tomorrow, we would still want Microsoft's help getting this product out into people's hands and we want them like, yeah.”
Nadella: High-ARPU, low-usage SaaS apps face disruption from AI
“And so I think the next generation of SaaS applications will have to sort of, if you are high ARPU, low usage, then you have a little bit of a problem. But if you are, we are the exact opposite. We are low ARPU, high usage.”
Nadella: State AI Regulatory Patchwork Disproportionately Harms Startups
“I mean, I think the fundamental problem of you know, this patchwork approach is quite frankly, I mean, between OpenAI and Microsoft, we'll figure out a way to navigate this, right? I mean we can figure this out. The problem is anyone starting a startup and try…”
Nadella: At massive scale, nothing in cloud infrastructure is a commodity
“Everything is a commodity, right? Compute, storage. I remember everybody saying, wow, how can there be a margin? Except at scale, nothing is a commodity.”
Haas: Energy Needs for AGI Exceed Big Tech Balance Sheets
“Get access to so much energy that's needed, we think, to drive AGI and ASI at numbers that are even well beyond the balance sheets of the giant Companies like a Microsoft, a Google, a Meta, an AWS, et cetera, an Amazon.”
Gurley: Microsoft refused to build massive AI cluster Altman wanted
“I think my own interpretation is Microsoft didn't want to build this big, you know, open AI playground or one as big as maybe Sam wanted to build. And so he went somewhere else and everybody, But everyone at the surface behaving like they're okay with that.”
Gurley: Google possesses a consumer AI asset stack Apple and Microsoft lack
“And, you know, you look at a company like Glean that I know you you're in and is doing well, you know, you can create Glean for the rest of us. If a company commits to being on the Google stack and has all these things and it becomes a combination that no one …”
Patel: Multi-gigawatt buildouts disprove claims that AI scaling is over
“Why is Mark Zuckerberg building a two gigawatt data center in Louisiana? Why is Amazon building these multi gigawatt data centers? Why is Google, why is Microsoft building multiple gigawatt data centers? Plus buying billions and billions of dollars of fiber to…”
Patel: Microsoft earns 50% to 70% gross margins on OpenAI models
“Microsoft's earning 50 to 70% gross margins on OpenAI models, and that's with the profit share they get to get, or the share that they give OpenAI, right?”
Patel: AMD will see less AI revenue from Microsoft and Meta in 2025
“Yes, I think they'll have they'll have a lot less success with Microsoft than they did this year. And they'll have less success than they did with Meta than they did this year.”
Nadella: Unlikely any foundation model achieves a two-year lead again
“I don't think there will be ever again maybe a two-year lead like this. Who knows? We, you know, it's all, you say that and somebody else, you know, drops some sample and suddenly blows the world away. But that said, I think it's unlikely that that type of, yo…”
Nadella: Microsoft Will Not Run Redundant Pre-Training Duplicating OpenAI
“Well, what we won't do is do it twice, right? Because after all, we have the IP from, like, it would be silly for Microsoft today, given the partnership with OpenAI to do two unnecessary-”
Nadella: OpenAI's partnership with Apple is accretive to Microsoft shareholders
“Ultimately, these things will have some overlap, but I also, in that context, the fact that they have the Apple deal is, in some sense, for the MSFT shareholder, you know, accretive, right?”
Nadella: Google makes more money on Windows than all of Microsoft
“I mean, I always say Google makes more money on Windows than all of Microsoft. I mean, literally.”
Gurley: Big Tech Licensing Acquihires Like Adept Are Not VC Wins
“The adept thing is which was positioned by the press is similar to the inflection outcome. There's no way that's a win for venture capitalists. Like, I'm sure venture capitalists try and spin it, and we heard some spin around inflection, but it, you know, I, i…”
Gurley: Microsoft's Inflection deal is a warning against overpaying in AI
“This is a warning sign that you can't just pay any price For any deal in the AI sector and get paid. And cause I don't, you know, this, I don't see this now. I don't see the current status as a company that's going to have a venture-like return from here.”
Gerstner: AI answer engines will operate below margin to take search share
“It would be surprising to me if we don't see Meta AI, and Microsoft, and ByteDance, and Perplexity, and all the others who are providing answer engines, ChatGPT, coming at them below margin, ok?”
Gerstner: Microsoft, Amazon, and Snowflake will accelerate growth rates in 2024
“We expect our forecast is that Microsoft and Amazon, you know, Snowflake, they'll all accelerate their growth rates this year, right?”
Gurley: Mega-cap cloud credit financing will cause market distortions
“What I fear is that this is happening at such a large level and maybe we haven't seen the end of it, right? I think there's reason you can see more that it's going to create a market distortion.”
Nadella: Microsoft manages compute capex as a single unified outlay
“My capital allocation is for the cloud from whether it is Xbox cloud gaming or Microsoft three, six, five, or for, Azure. It's one capital outlay. And then everything is a meter, as far as I'm concerned, from an MSFT perspective. It's a question of, hey, the b…”
Nadella: Copilot adoption pace is bigger than any Microsoft product in decades
“In fact, one of the things about Microsoft three six five was what was the next big thing after E five? Guess what? We found it in co-pilot. It's bigger than any suite. Like, you know, we talk about penetration and usage and the pace. It's bigger than anything…”
Nadella: Microsoft does not plan to sell its OpenAI stake
“You could also say, hey, the hundred and thirty five billion dollars that is, you know, today are equity stake, you know, is sort of illiquid, what have you. We don't plan to sell it, so therefore it's got risk associated with it.”
Gerstner: OpenAI has a $250B Azure compute commitment with Microsoft
“You have the profit you make off the two hundred and fifty billion dollar of the Azure compute commitment from OpenAI.”
Nadella: OpenAI has beaten every business plan presented to Microsoft
“And let me just say one thing Brad as both a partner and an investor, there is not been a single business plan that I've seen from open AI that they're put in and not beaten it.”
Gerstner: OpenAI revenue share sends billions annually to Microsoft
“So, you have the value in the rev share, billions per year going, going to Microsoft.”
Nadella: Microsoft will grow headcount, but with far higher leverage than pre-AI
“I will say we will grow a headcount. But the way I look at it is that headcount we grow will grow with a lot more leverage than the headcount we had pre-AI.”
Nadella: Azure Growth Would Have Hit 41-42% With More Compute
“Absolutely. Absolutely. There's no question. There's no question.”
Nadella: Running OpenAI workloads accelerates Microsoft's cost curve reduction
“When you have the biggest workload there is running on your cloud, that means not only are we going to learn faster on what it means to operate with scale, that means your cost structure is going to come down faster than anything else. And guess what? That'll …”
Nadella: AI chat unit economics differ fundamentally from search due to per-query GPU costs
“Search was pretty magical in terms of its ad unit and its cost economics, because there was the index, which was a fixed cost that you could then amortize in a much more efficient way. Whereas this one, you know, each chat to your point, you have to burn a lot…”
Nadella: AI agents will exponentially increase compute infrastructure demand
“When you think of an AI agent, it turns out the AI agents Is going to exponentially increase compute usage because you now are not even bound by just one human invoking a program. It's one human invoking programs that invoke lots more programs. And so that's g…”
Gerstner: Microsoft generates $10 billion in AI inference revenue
“You know, as Satya told us on the pod, they have ten billion in inference revenue, and I think he expects that to grow. Significantly.”
Gerstner: Microsoft is on an $80 billion annual CapEx run rate
“In their most recent quarter, they did about twenty billion in capex bill, and you just, you know, he said earlier in the year, which caused, or a couple of days ago, which caused a bit of a kerfuffle that they expected to spend eighty billion in capex this ye…”
Patel: Microsoft runs GPT models on AMD hardware for inference
“Microsoft has deployed GPT-style models on On other competitors' hardware, such as AMD they've, and some of their own, but mostly AMD, and so they can wring that out with software because they can spend hundreds of engineers, dozens of engineers' hours hundred…”
Patel: Cisco was fueled by speculative debt whereas NVIDIA is cash-backed
“Cisco's revenue, a lot of it was funded through private-slash-credit investments into building out telecom infrastructure, right? When we look at NVIDIA's revenue sources, very little of it is private-slash-credit, right? And in some cases, yes, it's private-s…”