Microsoft Corporation MSFT CEO Satya Nadella has cautioned against the hype surrounding artificial intelligence (AI), comparing the current frenzy to the dot-com bubble.
What Happened: During a conversation with Dwarkesh Patel that was made public on Wednesday, Nadella said AI's long-term impact must be measured by its ability to drive global GDP growth rather than arbitrary benchmarks.
"If you’re going to have this explosion, abundance, whatever, commodity of intelligence available, the first thing we have to observe is GDP growth," Nadella said.
"Before I get to what Microsoft’s revenue will look like, there’s only one governor in all of this. This is where we get a little bit ahead of ourselves with all this AGI hype."
He criticized the tech industry's tendency to claim artificial general intelligence (AGI) breakthroughs without real-world validation.
"Us self-claiming some AGI milestone, that’s just nonsensical benchmark hacking to me," he stated, adding, "The real benchmark is: the world growing at 10%."
Nadella also addressed concerns over reckless overbuilding in AI infrastructure, drawing parallels to the dot-com boom. "There was a lot of money lost," he said, referring to the early 2000s tech crash.
"Everybody’s going to race… the only thing that’s going to happen with all the compute builds is the prices are going to come down," the CEO said.
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Why It’s Important: Nadella's remarks highlight growing concerns about an AI investment bubble, where companies are pouring billions into infrastructure without clear economic returns.
Despite investor concerns over returns, big tech is going all in on AI, with Amazon, Meta, Microsoft, and Alphabet investing a record $320 billion in AI infrastructure in 2025. This marks a jump from $246 billion in 2024.e
Amazon is leading with over $100 billion in planned investment. Microsoft and Alphabet are each set to spend around $80 billion. Meta is committing more than $60 billion.
Meanwhile, on Wednesday, Microsoft also unveiled Majorana 1, its first quantum chip.
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