Satya Nadella warns of Microsoft’s AI survival challenge

Microsoft CEO Satya Nadella has admitted that the rise of artificial intelligence could put even the biggest tech companies at risk, including Microsoft itself. Speaking at an internal town hall with employees, Nadella said he sometimes lies awake at night worrying about whether the company will remain relevant in the future.

He explained that some of Microsoft’s largest and most profitable businesses may not hold the same importance in the coming years. “Some of the biggest businesses we’ve built might not be as relevant going forward,” Nadella told staff, according to The Verge.

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To make his point, he shared the story of Digital Equipment Corporation (DEC), a computer giant of the 1970s that lost its place in the industry because it failed to adapt to new technology, especially RISC architecture. Nadella revealed a personal connection, saying his first computer was a DEC VAX and that he once dreamed of working there. In an ironic twist, DEC’s decline ended up helping Microsoft, as engineers who lost their jobs at DEC later worked on Windows NT.

The discussion on corporate survival came after a UK-based employee told Nadella that Microsoft now feels “colder, more rigid, and lacking in empathy” compared to the past. Instead of brushing off the concern, Nadella acknowledged the criticism and said leadership would reflect on it. According to an audio recording obtained by CNBC, he replied, “I deeply appreciate that, the question and the sentiment behind it. I take it as feedback for me and everyone in the leadership team. At the end of the day, I think we can do better, and we will do better.”

Nadella’s remarks highlighted two challenges facing Microsoft: adapting to fast-moving AI technology and creating a workplace where employees feel valued and supported. The company has invested heavily in AI, building partnerships with OpenAI and adding new AI features to its products. But Nadella made clear that innovation alone is not enough.

Industry observers say his openness shows how even leading tech firms recognize the need for balance. As one analyst put it, “Innovation may keep Microsoft ahead, but empathy will keep it together.”

For Microsoft’s 220,000 employees worldwide, Nadella’s comments worked as both a warning and a call for unity—reminding them that survival in the AI era will depend not only on cutting-edge technology, but also on building a culture of trust and empathy.