AI is yet to have the same transformative impact on business and knowledge work akin to the launch of Excel, according to Microsoft CEO Satya Nadella, but he appears confident a big breakthrough is looming on the horizon.
Speaking on Dwarkesh Patel’s podcast, Nadella harkened back to Microsoft Excel and its impact on financial forecasting in years gone by, which involved the exchange of faxes and hard copies - an often laborious process which, upon reflection, significantly impeded enterprise efficiency.
“Faxes went around, somebody then got those faxes and then did an inter-office memo that then went around and people entered numbers … ultimately, a forecast came, maybe just in time for the next quarter,” Nadella said.
“Then somebody said, ‘hey, I'm just going to take an Excel spreadsheet, put it an email, send it around, people will go edit it, and I'll have a forecast,’” Nadella added.
"So the entire forecasting business process changed because the work, the work artefact and the workflow changed.”
Ultimately, this is what needs to happen with AI being introduced into knowledge work, Nadella noted.
The Microsoft chief exec spoke about how his own work processes have changed as he’s begun to use AI, mentioning that he had even deployed Copilot in preparation for this podcast.
This shift towards AI becoming a major presence in staff workflows will take time though, he thinks, with management teams and individuals engaged in knowledge work having to gradually shift processes towards AI use.
Changing the metric on AI success
Nadella also focused on how the industry at large is measuring the success of AI, particularly regarding how it impacts the global economy and creates market value.
In particular, he hit out at the industry fixation on achieving artificial general intelligence (AGI), which represents the point at which AI can match or surpass human cognitive capabilities.
Sam Altman, CEO of OpenAI, Microsoft’s leading partner on the technology, has been highly vocal about the company’s work toward achieving this goal in recent years.
“Us self claiming some AGI milestone - that's just nonsensical benchmark hacking to me,” Nadella said.
RELATED WHITEPAPER
Notably, Nadella said the real benchmark for AI’s success is the world growing in economic terms.
The same principle could be applied to AI success within businesses. Firms need to keep their focus on what value AI products are driving within companies and within staff workflows.
Speaking to ITPro, Dom Couldwell, head of field engineering EMEA at DataStax, agreed with this outlook, noting that AI projects should be “judged on the value that they deliver to the business" - be that in terms of a return on investment (ROI) or the additional benefits afforded to individual workers using the tech.
“Without those specific metrics, it is hard to justify the spending and take a project from proof of concept into production, particularly at scale,” he said.
How can businesses get value out of AI?
The most successful AI projects are the ones that begin by focusing on the value side first and then work backward, Couldwell said, rather than those which haphazardly dive into the tech and try to establish a use case via experimentation.
Successful firms look for a ‘Minimal Viable Product (MVP)’ as opposed to over-engineering, he added. This means asking what the minimum level of complexity needed is.
“The added risk around Gen AI projects is that teams are adopting this new tech for the sake of it versus really needing it or having that solid business case in the first place. While there might be demand from the business to be seen to be doing something around AI, taking the time to investigate and test beforehand will pay off,” Couldwell said.
“In terms of how to approach this, my advice with the companies I have worked with would be to pressure test the approach - pick a project that is directly linked to how the business makes more revenue or saves significant costs in order to put together a project, but not an area that is too tied to other processes,” he added.
This process ensures that businesses can build with AI and demonstrate what’s effective before looking at larger projects that can benefit from the lessons learned along the way.
Is AI delivering for businesses?
There are mixed reports from companies as to how effectively AI is delivering value in businesses, though Microsoft itself claimed late last year that generative AI tools offer a return on investment (ROI) of $3.70 for every dollar invested.
The report also claimed that AI deployments take under eight months to roll out, with ROI delivered within 13 months.
Other research has been less positive, though, with research from Appen in October 2024 suggesting that ROI from AI has dropped significantly over the last three years due to data issues.
While 56.7% of AI projects delivered meaningful ROI in 2021, the report found, this figure dropped to 53.5% in 2022 and 51.9% the year after. By 2024, meaningful ROI delivery had sunk to 47.3%.
MORE FROM ITPRO
- AI was touted as a game changer for productivity – but employees are still saddled with growing workloads
- Microsoft exec touts benefits of AI productivity gains
- AI could be the key to solving the UK’s productivity problem
-
How to implement a four-day week in techIn-depth More companies are switching to a four-day week as they look to balance employee well-being with productivity
-
Intelligence sharing: The boost for businessesIn-depth Intelligence sharing with peers is essential if critical sectors are to be protected
-
‘LaMDA was ChatGPT before ChatGPT’: Microsoft’s AI CEO Mustafa Suleyman claims Google nearly pipped OpenAI to launch its own chatbot – and it could’ve completely changed the course of the generative AI ‘boom’News In a recent podcast appearance, Mustafa Suleyman revealed Google was nearing the launch of its own ChatGPT equivalent in the months before OpenAI stole the show.
-
Microsoft is doubling down on multilingual large language models – and Europe stands to benefit the mostNews The tech giant wants to ramp up development of LLMs for a range of European languages
-
Everything you need to know about OpenAI’s new agent for ChatGPT – including how to access it and what it can doNews ChatGPT agent will bridge "research and action" – but OpenAI is keen to stress it's still a work in progress
-
‘Humans must remain at the center of the story’: Marc Benioff isn’t convinced about the threat of AI job losses – and Salesforce’s adoption journey might just prove his pointNews Marc Benioff thinks fears over widespread AI job losses may be overblown and that Salesforce's own approach to the technology shows adoption can be achieved without huge cuts.
-
AI adoption is finally driving ROI for B2B teams in the UK and EUNews Early AI adopters across the UK and EU are transforming their response processes, with many finding first-year ROI success
-
An executive producer at Xbox Games Studios told laid off staff to use AI for counseling, and it’s the most ludicrous thing I’ve ever seen in my lifeOpinion In the aftermath of Microsoft layoffs, promoting AI career advice feels supremely cold
-
‘The latest example of FOMO investing’: Why the Builder.ai collapse should be a turning point in the age of AI hypeNews Builder.ai was among one of the most promising startups capitalizing on the generative AI boom – until it all came crashing down
-
Is ChatGPT making us dumber? A new MIT study claims using AI tools causes cognitive issues, and it’s not the first – Microsoft has already warned about ‘diminished independent problem-solving’News A recent study from MIT suggests that using AI tools impacts brain activity, with frequent users underperforming compared to their counterparts.
