Satya Nadella Praises DeepSeek as Microsoft Accelerates AI and Sustainability Push

Microsoft CEO Satya Nadella has commended DeepSeek, a Chinese AI firm, for developing an advanced AI model that has reshaped expectations at Microsoft. The company's R1 model, integrated into Microsoft Azure in January, delivered high performance using fewer resources — thanks to technical innovations beyond Nvidia’s CUDA system.

Speaking to The Verge, Nadella was impressed by how a 200-person team created a top-performing app that rapidly rose to No. 1 on the App Store. “That’s the new bar for us,” he stated, highlighting the need for Microsoft to match the agility of smaller AI innovators.

Microsoft’s AI Tools Struggle to Match ChatGPT’s Popularity

Despite significant investment, Microsoft’s Copilot AI assistant hasn’t achieved widespread adoption, especially when compared to OpenAI’s ChatGPT. Even high-profile promotions, such as a Super Bowl ad, failed to push Copilot into mainstream popularity.

In response, Microsoft is shifting focus to new internal projects like Muse — an AI model trained using Xbox gameplay data. Muse is designed to assist game developers in optimizing and creating more dynamic content.

$80 Billion Data Center Investment and Climate Goals

Microsoft plans to invest $80 billion in data center expansion this year to support the growing demand for AI workloads. However, the move has raised concerns among employees about the environmental impact.

The company originally pledged to become carbon-negative by 2030, but AI’s high energy consumption has made that promise harder to achieve. “Generative AI has made our carbon-free goal four times harder, but we are doubling down,” said Brad Smith, Microsoft’s vice chair and president.

Balancing AI Growth with Sustainability

To address sustainability, Microsoft has already secured 34 gigawatts of carbon-free energy across 24 countries. Smith remains optimistic that AI technology itself could be used to resolve some environmental challenges. “We plan to surprise the world in 2030 with what we’ve accomplished,” he added.

Nadella also emphasized the importance of speed in the AI race: “We must move as fast as these smaller teams around the world,” pointing to a more aggressive and streamlined strategy for Microsoft’s AI future.

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