Microsoft working to reduce AI costs, expand ecosystem as global adoption rises: Satya Nadella
New Delhi, October 22
Tech giant Microsoft is focusing on building a broader artificial intelligence ecosystem and reducing the cost of AI-powered services, Chairman and CEO Satya Nadella said in his annual letter, highlighting the company's strategy as AI adoption accelerates globally.
Nadella noted that "Super Intelligence" is changing every organisation's inputs and outputs, while inference is making marginal cost a vital factor in software economics.
"As a result, customers will increasingly measure the cost of tokens against the outcomes they produce," Nadella said, referring to this as the "cost-to-outcome" frontier and adding that Microsoft is focused on optimising it.
According to Nadella, Microsoft's focus in the emerging era of superintelligence is not just on the scale of opportunities presented by AI, but also on delivering real-world benefits to countries, communities and businesses worldwide.
Noting that the company has a broad tech stack, diverse businesses and business models, and a platform- and partner-first approach, Nadella added, "...we are building a frontier ecosystem that enables others to build more value on top of and through the ecosystem than is captured inside."
As per the letter, the company is investing to serve a diverse set of customers while also creating the infrastructure to power its own differentiated and high-value first-party products, such as Copilot.
"Based on the demand we see and the efficiencies we are driving, I am confident in the long-term returns on my investments. That confidence starts with being disciplined about what we build and who we build it for. We are investing to serve a diverse set of customers, while also creating the infrastructure to power our own differentiated and high-value first-party products like Copilot," Nadella said.
Nadella further added that Microsoft is accelerating capacity deployment, improving efficiency and reducing costs across its technology infrastructure to support customer growth and deliver long-term shareholder value.
He also highlighted the company's financial performance, adding that Microsoft recorded revenue of USD 331.8 billion in FY2026, up 18 per cent year-on-year, while Microsoft Cloud revenue rose 27 per cent to USD 214.4 billion. Azure grew 41 per cent, surpassing USD 100 billion for the first time, while Microsoft 365 Copilot crossed 30 million paid seats. Operating income increased 21 per cent to USD 155.2 billion.
"As Super Intelligence moves from experimentation to broad adoption, we are focused on ensuring its benefits and economic value are shared and translated into lasting impact for people, organisations, and communities," he noted.
— ANI
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