Satya Nadella reinvented Microsoft once. Can he do it again in the AI era?

Microsoft CEO Satya Nadella speaks at the Microsoft AI Tour event in Munich, Germany, on Feb. 25, 2026.

Sven Hoppe | Picture Alliance | Getty Images

On a sunny day in Seattle in late September, about 50 executives representing large Microsoft customers had a rare opportunity. They could ask anything of CEO Satya Nadella.

One attendee wanted to know what Microsoft could do to help companies adapt to the artificial intelligence age. Nadella responded by emphasizing the importance of "diffusion inside the enterprise," meaning AI tools need to be widely deployed.

"Like all things, change is always bottom up, top down, and middle up," said Nadella, sporting a tight black crewneck and dark gray slacks, as he strode across the stage at the downtown Paccar Pavilion.

For the 59-year-old Nadella, who's spent over half his life at Microsoft, the gathering landed at a pivotal moment, as the software giant tries to magnify its role in the AI boom. Of late, Nadella has been inserting himself more into the AI discourse, posting on X last month about the need for "deliberate pacing" in model development, and days later addressing safety fears at the All-In Summit in Los Angeles.

Despite its almost $4 trillion market cap, Microsoft has yet to break out as an AI leader. Nvidia dominates in AI chips, Anthropic and OpenAI boast the foremost models, Meta just released the first mass-market personal agent, and Google's Gemini-powered services are popular with businesses and consumers.

Microsoft was aggressively early to AI through an investment in OpenAI, but that alliance has frayed. While the software giant has a big business in renting out chips for AI developers through its Azure cloud, its Copilot technology isn't pervasive in the workplace, and its proprietary AI models remain niche.

The company is hosting a Windows and Surface event in San Francisco on Wednesday, describing it in an invitation as "a conversation on how local AI will shape the next chapter of the PC."

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