Satya Nadella reveals the one thing companies must do to survive the AI era

Artificial Intelligence (AI) is changing the way businesses work. But, Microsoft CEO Satya Nadella believes that using the latest AI model will not be enough for companies to succeed. In a recent post on X (formerly Twitter), Nadella shared his thoughts on how firms should prepare for an AI-driven economy. Nadella explained that previous technology shifts helped people work faster and more efficiently. However, AI is different because it can create a continuous learning cycle between humans and machines.

Survey

He introduced two key ideas: human capital and token capital. Human capital includes the knowledge, experience, judgment, creativity and relationships that employees bring to a company. Token capital refers to the AI capabilities and systems that a company develops and owns.

Also read: Anthropic wants Claude Fable 5 and Mythos 5 back online, sends execs to US for talks 

Importantly, Nadella does not believe AI will reduce the value of people. Instead, he argues that human expertise becomes even more important as AI improves. “Human capital does not become less valuable as token capital grows. It only becomes more valuable,” he wrote in the post.

He added, “Humans will set ambitious goals, connect dots across domains, build relationships, and recognise patterns that matter most. Without human direction, you have compute running in circles.”

Also read: OpenAI sued after ChatGPT allegedly urged woman toward suicide, complaint claims  

Nadella also said that companies should focus on building their own “learning loop” rather than constantly chasing the best AI model. “The real opportunity is not in picking the best model but instead in building a learning loop on top of models where human capital and token capital compound,” he said. 

The Microsoft CEO also warned against a future where only a handful of AI companies capture most of the economic benefits. “The last thing any of us want is a world where every company across every sector is ceding value to a few models that eat everything they see. If all the value is accrued by only a few models, the political economy will simply not tolerate it,” he said.

Nadella believes the businesses that succeed in the AI era will be those that turn their experience and expertise into a learning system that keeps improving over time. “In my view, our priority has to be building a frontier ecosystem, not just a frontier model, so value flows broadly across every company, every industry, and every country. One where every organization can own the learning loop that encodes its institutional knowledge, compounding its human and token capital.”

Also read: AI may bring cyberattacks and job losses if left unchecked, warns Anthropic CEO Dario Amodei   

Ayushi Jain

Ayushi works as Chief Copy Editor at Digit, covering everything from breaking tech news to in-depth smartphone reviews. Prior to Digit, she was part of the editorial team at IANS. View Full Profile