How Microsoft's Satya Nadella became tech's steely-eyed AI gambler

Earlier this year, Satya Nadella hammered out a deal that surprised everyone outside his inner circle at Microsoft.

- KAREN WEISE & CADE METZ

Nadella, Microsoft's chief executive, had his eyes on a Silicon Valley start-up called Inflection AI. The company's chief executive officer, Mustafa Suleyman, was one of the founders of the pioneering artificial intelligence company DeepMind. He had raised more than $1.5 billion in funding and hired top researchers for his new company, but he had a not-so-great reputation as a boss. Inflection also didn't seem to make any money.

Microsoft still shelled out more than $650 million to license Inflection's technology, hired most of its staff and put Suleyman in charge of a more than $12 billion chunk of Microsoft's business. It was, to put it mildly, risky.

Risky bets on AI have become a habit for Nadella. Over the past five years, he has committed to investing $13 billion in another aggressive young company called OpenAI, even though it hadn't yet made much money. And he told all of his lieutenants to find ways to build AI into Microsoft's many, many products, even though the technology didn't always work correctly.

But he had his reasons. Though it could be years before he knows if any of this truly pays off, Nadella sees the AI boom as an all-in moment for his company and the rest of the tech industry. He aims to make sure that Microsoft, which was slow to the dot-com boom and whiffed on smartphones, dominates this new technology.