In a surprising turn of events, Microsoft CEO Satya Nadella openly admitted that despite spending billions on artificial intelligence, it is creating "basically no value" so far. Nadella's calm statement comes at a time when AI is expected to be the next big thing.—Think about self-driving cars, chatbots that excel in customer service, and systems ready to change whole industries. So why is one of the biggest tech companies slowing down the excitement about AI? Let's find out.
A Reality Check Amid the AI Boom
Nadella’s comments were made during an interview on February 20, 2025. He compared the current excitement about AI to the dot-com bubble of the late '90s, which was a time of high hopes followed by a big crash. “Claiming we’ve reached some AGI milestone is just nonsense to me,” Nadella said, talking about the industry's focus on artificial general intelligence (AGI), which is an AI as smart as humans. “The real measure is if the world is growing at 10%.” In other words, if AI isn't boosting global economic growth, it's not living up to its potential.
This isn't just talk. Microsoft has invested $12 billion in OpenAI, the company behind ChatGPT, and joined President Donald Trump's big $500 billion Stargate project, an AI infrastructure plan announced in January 2025. Yet, Nadella's comments suggest the returns aren't matching the investment—at least not yet.
The Numbers Tell a Story
The AI market is growing fast and is expected to reach $826 billion by 2030, according to Statista. However, real benefits are still hard to see. Microsoft plans to spend $80 billion on AI data centers in 2025, a huge amount that has caught investors' attention. A report from January 2025 by Goldman Sachs estimated that generative AI has added less than 0.1% to U.S. GDP growth so far. In contrast, the internet's early days added 1.1% to GDP within ten years, showing a big difference.
Nadella isn't the only one who is doubtful. Elon Musk, the outspoken CEO of Tesla, recently criticized the Stargate project as being overhyped. Meanwhile, Salesforce CEO Marc Benioff suggested that Microsoft might drop OpenAI because its technology is expensive and slow. However, Nadella's view is notable because Microsoft is the main supporter of OpenAI, a partnership that has led to tools like Copilot and enhanced Azure's AI services.
A Silver Lining?
Despite the grim assessment, Nadella isn’t writing AI off. He sees it reshaping “knowledge work”—think broader access to tasks once reserved for specialists, like drafting legal letters or crunching data. “AI may broaden what’s historically been considered cognitive labor,” he said on February 21, hinting at a long-term payoff. And he’s not blind to competition: he praised China’s DeepSeek AI in late January for its “super impressive” efficiency, suggesting innovation elsewhere might light a fire under the industry.
For now, though, the verdict is clear: AI’s flash hasn’t translated to cash—or societal wins. Posts on X echo the sentiment, with users like @DigitalLeadTim quipping, “Microsoft CEO Admits That AI Is Generating Basically No Value,” alongside links to the news. It’s a wake-up call for an industry riding high on promises.