Leadership CONNECT: 22-MAY-2025 (Y25W22)

Last week, Thanks to Michael Lugassi 

I have observed Microsoft’s growth over the past 11 years since Satya became CEO. In 2013, Microsoft’s market capitalization was approximately $261.5 billion. As of May 2025, it has risen to about $3.36 trillion. This represents an increase of roughly 1200%.

Before I share my perspective, let me present the latest insights eloquently expressed by Michael Lugassi, a long-time inner maven of modern tech:

In a t-shirt and sneakers, Satya aligned things with an announcement I would summarize as “production-ready.” A product line built slowly and correctly because that’s what Microsoft’s long-time customers demand.

Alignment with other key players:

• Alignment with Google (Gemini) for businesses, with the deep integration of Copilot into Office 365.
• Alignment with Amazon Web Services (AWS) (Bedrock), integrating hundreds of models, a smart router, and the option to train private models.
• Alignment with Cursor, with the rewriting of VS Code as an AI tool with editing capabilities, rather than an editor with AI capabilities.

In terms of code, this goes beyond alignment:

• Tight integration with GitHub will soon make Cursor disappear (will it be sold to Google?).
• GitHub’s cloud code agent will eliminate OpenAI Codex, Claude Code, and competing asynchronous code solutions.
• Satya’s monthly commitment to a fresh version will leave other IDEs behind.

Working with friends:

• Three video calls along the way with Musk, Jensen, and Altman—for all three, Microsoft is a lighthouse and a huge customer.

And this was also present:

• Massive shift to ARM chips (may God help Intel Corporation).
• Deep support for the MCP protocol (perhaps the last thing we’ll remember from Anthropic).
• An attempt to invent another standard for agents called NLWeb.
• And a deep, academic-level research tool that allows any novice with Microsoft Azure credits to solve problems in the universe.

This is a crazy time to invent something. By next week, someone else will have invented it for you.

My Take 1: Weak Innovation (0 to 1), Strong Scaling (1 to 100)

Historically, Microsoft struggled with innovation (zero to one) but excelled at scaling (one to one hundred).

This has been true for DOS, Windows, Internet Explorer, Cloud, and now AI. They were not invented by Microsoft but copied or acquired to scale. (This strategy did not perform well in the mobile market (lost to Apple) and the search market (lost to Google), but overall, it has been successful. This is what they are doing now with AI. 

My Take 2: Making Big Bets on OpenAI

Microsoft, under Satya Nadella, is highly aggressive in making bold investments. Their investment in OpenAI practically gave rise to the field of modern AI. As depicted in the following: