Satya Nadella, CEO of Microsoft Corporation attends the annual meeting of the World Economic Forum (WEF) in Davos, Switzerland, January 17, 2017. REUTERS/Ruben Sprich
Satya Nadella, Microsoft's CEO, speaking at Davos © Reuters

Satya Nadella, Microsoft’s chief executive, was faced with an unusual PR debacle in March. The troublemaker was Tay, a teenage girl-inspired bot, which had been programmed to interact with Twitter users.

Within hours of activating her on the social media site, Tay was parroting racist, misogynistic and pornographic lines that other users prompted her to repeat.

Microsoft rapidly grounded the objectionable bot with a statement that said it was “deeply sorry for the unintended offensive and hurtful tweets from Tay”.

The experiment — and Tay’s accidental re-emergence a few days later to send Twitter users streams of random messages, including one blaming its behaviour “ on the alcohol” — was, publicly, a disaster. Yet Mr Nadella dealt with it empathetically. He emailed the Microsoft team behind Tay — artificial intelligence researchers, software engineers, and improv comedians — the morning after Tay was neutralised.

“The first way we dealt with this was by making sure that the team didn’t feel bad for actually taking the risk,” Mr Nadella says.

Months later the same team launched Zo, another female millennial-inspired bot, on to Facebook Messenger and chat app Kik.

“You’ve got to make sure that if you make mistakes, you learn from [them],” Mr Nadella says.

This encapsulates the management style of the 49-year-old chief executive — frank, decisive and forgiving.

When he took the role in 2014, analysts viewed him as a safe option — a classic engineer and company man who had been with Microsoft since 1992.

Born in the southern India city of Hyderabad, Mr Nadella is the son of a civil servant and a teacher of Sanskrit drama. He has a reputation for being industrious. Early in his career, he spent weekends in Chicago to complete an MBA at the Booth School of Business, a flight of several hours from Microsoft’s headquarters in Redmond, Washington state.

There was doubt that he was bold enough to right the ship at Microsoft, which had spent decades producing flops including the music player Zune and Windows Mobile. Yet three years in, Microsoft’s stock has jumped nearly $200bn in value to more than $492bn.

Mr Nadella is now focused on the company’s future, which he is betting on artificial intelligence — the rise of smart machines that can augment human capability.

“It is going to be about people working with machines. So that means you have got to be able to understand machines and how they work,” he explains on the sidelines of a conference in Munich, Germany. “There is no walk of life that is not going to require computational understanding.” He chuckles at the mention of a 2015 McKinsey report which estimated that activities taking up more than 20 per cent of a chief executive’s working time could be automated by an intelligent assistant, saying: “I really need that.”

He is future-proofing Microsoft and its workers so the company gets the most out of AI. In September, he created an AI team of more than 5,000 academics and engineers to design the operating system of the future.

But he is also looking beyond Microsoft to the rest of the world.

“The most exciting thing to me is beyond what we are doing ourselves, which is to take the same AI capability we have and make it available so everybody can use it,” he says. “ Take the state I was born in [Andhra Pradesh] and the state I live in [Washington]. Both are using essentially the same machine-learning algorithms to make high school dropout predictions. That to me is democratising AI.”

At Microsoft’s Redmond campus, a newly opened AI school teaches workers how the technology is applied in user products such as Microsoft’s digital assistant Cortana.

Current and former workers say this new Microsoft is unrecognisable from the one under Steve Ballmer.It may be down to times changing, while Mr Nadella emphasises curiosity, Mr Ballmer prioritised defending the group’s PC business.

Mr Nadella, a voracious reader whose interests cover game theory, German philosophy, global macroeconomics and English classical poetry, likes to quote from Mindset, a book by Stanford psychologist Carol Dweck; many Microsoft employees keep a copy of it, too.

Ms Dweck’s theory is that most people fall into one of two groups: learn-it-alls, who are life-long students, and know-it-alls, who act on presumed knowledge.

“Even if the learn-it-all starts with less innate capability, they will always do better than the know-it-all,” says Mr Nadella.

“Given our success, there were times when we [Microsoft] acted like know-it-alls. One of the things that has been a real learning for me is how important it is to have a learning culture that fosters true innovation.

“The notion that you went to school until you were 21 and then after that got into a profession and stayed in that same profession until you’re 80 is just not going to be true any more, because of the pace of technological change in that period,” he says.

Life-long learning, he continues, will be powered by AI in partnership with services such as LinkedIn, Microsoft’s largest-ever acquisition, at $26.2bn, which was made last June.

“The [LinkedIn] news feed will show you learning modules so that you can seek the jobs of the future, so that your economic opportunity is maximised,” Mr Nadella says.

As the Tay debacle showed, the world have a long way to go before AI brings us bots that can seamlessly replace human jobs. But Mr Nadella hopes to build superhuman combinations of the two.

He says: “I think it is the coming together of liberal arts and sciences that are going to keep the human creativity and ingenuity [alive] in an age where machines are intelligent.”

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