AI could lead to better wages and jobs as it faces government focus, says Microsoft chief

Technology's potential benefits will depend on the level of commitment and investment that countries are willing to put in, Satya Nadella says in an exclusive interview

Satya Nadella, chairman and chief executive of Microsoft, said improving workplace productivity could directly translate into economic growth for an organisation. Victor Besa / The National

Microsoft's chief executive and chairman expects most governments to regulate artificial intelligence soon, and predicts that countries that properly use the technology will become leaders in the economy of the future.

While acknowledging that the technology will cause some upheaval in many workplaces, AI can also help “create better wages and interesting jobs”, Satya Nadella told The National in Abu Dhabi.

For countries, AI's potential benefits will depend on the level of commitment and investment they are willing to put in, from government initiatives to widespread adoption, he said in an interview at the Microsoft AI conference on Thursday.

This will be made possible by “doing frontier work where you're able to get the technology and do your own foundational work and, more importantly, intensely adopting technology and getting societal benefits from it”, Mr Nadella said.

“Any country or any region that does both will absolutely benefit.”

Mr Nadella – who took over from co-founder Bill Gates' successor Steve Ballmer in 2014 – said generative AI platforms such as ChatGPT, created by Microsoft-backed OpenAI, will move on from what some studies have perceived as hype and become more about having an impact on real people's lives.

'A billion AI prompt engineers'

For the workforce - Mr Nadella acknowledges that AI will cause “some displacement” - mitigating its perceived negative effects will be possible by “proactively” managing the technology.

Several studies have suggested that AI will steal jobs from humans as it is capable of taking over mundane roles.

However, Mr Nadella says he would rather view the technology as a “co-pilot” – which is also the name of the AI assistant on the Microsoft 365 software suite.

“The first thing [AI] does is it removes the drudgery in the work we already have and brings back even better wage support,” he said.

“If you improve productivity in any function, it directly translates into economic growth for that organisation, which will parlay into wages. Being more productive will only help you get more done and be more employable.”

Achieving this will be done by becoming “open-minded” to AI, or any technology for that matter, said Mr Nadella, who said reskilling and upskilling of the workforce was a “national and international priority” to help the employees cope with the technology's fast pace.

“We did worry about what would happen to all the typists when word processing came in, but we found many more knowledge-work jobs,” he said.

“Let's take it today: There are around a hundred million professional software developers – but I think that there will be a billion [AI] prompt engineers.”

Governments should lead AI regulation

AI, long used in businesses and society, was brought forward by the emergence of ChatGPT.

In January, Microsoft strengthened its commitment to the technology by investing a reported $10 billion into OpenAI.

Praise for the technology, due to its advanced conversational skills, led to a race between the biggest technology companies such as Microsoft, Google, Amazon and Oracle, and figures such as Elon Musk, owner of social media platform X, formerly Twitter.

However, its sudden rise has also raised questions about how data is used in AI models and how the law applies to the output of those models, such as a paragraph of text or a computer-generated image.

This has prompted calls for regulations to rein in the AI industry amid concerns about unbridled growth that could lead to several risks.

“At the end of the day, governments have to do what they are really there to do, which is to ensure that our societies and countries are safe,” Mr Nadella said.

“That's why we have regulation … and there's no reason why they can't apply that even to technology, quite frankly.”

Global regulators are already discussing how to regulate generative AI amid “tension” that exists between authorities and the technology sector in general, according to industry experts.

Such tension is “manifold” and exists within the open-source communities developing AI models, as well as in the debate over who is responsible or accountable throughout the supply chain, particularly on the data used to train large language models, they said at the Dubai Assembly for Generative AI last month.

The UK began hosting the AI Safety Summit 2023 this week, with government officials, leading AI companies, civil society groups and experts in attendance.

Discussions centred on the risks associated with AI, particularly frontier AI models, and determining how these risks can be mitigated through co-ordinated international action.

Mr Nadella acknowledged that regulations for AI may not come immediately but said he welcomed the dialogue taking place to address concerns about the technology.

“Some of [the regulations would come and] are voluntary over time. I think it will develop enough understanding of what really needs to be regulated,” he said.

“We should be thinking of AI safety from the get go. It's also good to talk about some of the existential risks of AI, as well as its potential real-world harms.”

UAE 'fantastic' for AI

Microsoft, which recently closed its $68.7 billion acquisition of video games developer Activision Blizzard, will “absolutely” continue to invest in the Middle East, Mr Nadella said, without providing further details.

In particular, it is planning to ramp up its cloud computing infrastructure in the region as it seeks to help smaller business and public sector companies boost productivity.

He specifically pointed out efforts being made in the UAE when it comes to large language models, which include the home-grown English LLM Falcon and the English-Arabic Noor and Jais platforms.

Abu Dhabi cloud-computing company G42 last month also teamed up with OpenAI to focus on using the latter's generative AI models in sectors such as financial services, energy, health care and public services.

“The diffusion rate of AI is very high, unlike even the cloud,” Mr Nadella said.

Diffusion rate refers to the rate at which a new idea spreads from one consumer to another.

AI “really enables lots of businesses to get created and all societies and countries to benefit”, he said.

At the Microsoft event, two UAE start-ups, ASI and DeepOpinion, along with Emirates airline and G42, demonstrated their generative AI services to Mr Nadella.

Home-grown efforts such as these will play a vital role in promoting the technology's applications and encourage more entrepreneurial opportunities, he said.

“It's fantastic – the fact that there are people here … doing cutting-edge LLMs.”

At the event, Microsoft also announced the availability of its Azure OpenAI Service from the company’s UAE cloud data centres.

The service, which will go live this month, can be used by companies to develop AI applications such as virtual assistants, content and code generation, and image editing tools.

Ultimately, the launch of the service aims to help companies start building solutions “for the world, not only the region”, Mr Nadella said.

“Small businesses in the UAE can be more productive. The public sector can really become more efficient,” he said.

The outcomes of applying generative AI in major industries such as health care and education “are something that we can shape through our investments and the investments that the entire cross-sector of that part of the economy makes”.

Market opportunities

Geopolitical and macroeconomic issues have been a negative for stocks worldwide, including technology.

However, the use of technology itself is a “great opportunity” for companies in the sector to fend off these challenges, which include high inflation and interest rates, Mr Nadella said.

“The thing to stay focused on is to use technology, and software in particular, as a big deflationary force in an inflationary world because that's the greatest contribution we can make,” he said.

Microsoft last week reported its third-quarter net profit surged 27 per cent to $22.3 billion, triggering a rally in its share price as it beat Wall Street estimates.

The company, as was the case with its fellow Big Tech peers, benefitted from a post-Covid boom during which demand for digital services and products spiked.

Its stock has jumped more than 37 per cent since the start of 2023.

“High inflation rates are going to be in that. You have to run your businesses differently. And it's a great opportunity for us to make sure that we parlay these advances in AI into productivity gains,” Mr Nadella said.