Satya Nadella, Microsoft CEO, concludes a decade of remarkable expansion through cloud computing and AI.

Satya Nadella celebrates his tenth anniversary as Microsoft CEO on Sunday, completing a remarkable decade of exponential growth by transforming the sluggish software behemoth into a dynamic force in cloud computing and artificial intelligence. Since assuming leadership in 2014, Nadella has propelled Microsoft’s stock to a staggering increase of over 1,000%, surpassing the modest 185% growth of the broader S&P 500. With a market value of $3 trillion, Microsoft now reigns as the most valuable publicly traded company in the United States, surpassing even its longstanding competitor, Apple.

“Nadella’s experienced the biggest transformation of a tech company ever,” said Wedbush Securities analyst Daniel Ives. “The only one that rivaled that was (Steve) Jobs, who came back to Apple and turned it around with the iPhone.”

Microsoft has created $2.8 trillion in shareholder wealth over the past decade, meaning an investor who bought a $10,000 stake in Microsoft when Nadella took over and did nothing with those shares would now be worth about $113,000.

HOW DID IT HAPPEN

“Our industry doesn’t respect tradition — it only respects innovation,” Nadella told employees 10 years ago in an opening memo that hinted at bigger changes to come. Microsoft declined interview requests.

Now a Wall Street hero, some were initially skeptical that such a change could come from an insider who had already spent 22 years in Redmond, Washington. He is only the third Microsoft CEO after Steve Ballmer, who served for 14 years, and Bill Gates, who founded the company in 1975 and took it public in 1986.

Major changes happened quickly under Nadella’s leadership. He allocated resources to build the Azure cloud computing platform, shifting focus away from the company’s long-standing reliance on its flagship Windows operating system and the royalties it receives from every PC sold with it. And he largely held back Microsoft’s ill-fated attempts to catch up in the smartphone market, marked by his predecessor Ballmer’s $7.3 billion purchase of Nokia’s phone business.

But some of the biggest changes were in the company’s culture, a shift from Microsoft’s brash external reputation and internal bickering to a more collaborative approach that Nadella has modeled on his own collegial personality and engineer’s mindset.

LEARN ALL CULTURES

“Microsoft is known for rallying forces with a competitive fire,” Nadella said in his 2017 autobiography. “The press loves it, but it’s not me.”

Much of Nadella’s strength is how he stands apart from the typical “very strong ego CEO,” said Raimo Lenschow, an equity analyst at Barclays who covers 36 technology companies. Instead of making bold statements, Lenschow said Nadella is taking a more measured approach to explaining. “where does he think the future is going.”

And “whether it’s a person preparing food in the cafeteria, an engineer, a CFO or a customer, he treats everyone the same, with respect,” said Ives. This is not the case only with Wall Street analysts.

The small startup from Zeeland, Michigan, which had a booth at January’s CES gadget show in Las Vegas, caught Nadella’s curiosity when he showed up, shook founder Tim Murphy’s hand and asked for a demo. The product, Audio Radar, visualizes video game sounds for deaf and hard of hearing gamers.

“He’s very down to earth,” said Murphy, who was there with a small crew that included his teenage son. “I gave him the pitch, I made some plays, and he said, ‘It’s amazing what you’re doing.’ To be honest, I don’t really remember too much of what he said because I was just shocked.”

Nadella has long prioritized the accessibility of technology, and she has learned from her experience of raising a visually impaired, quadriplegic and cerebral palsy son. Zain Nadella died in 2022.

AI PUSH

What has propelled Microsoft to its latest heights is its emergence as an AI leader, setting the agenda for how AI tools could be used at work and in society. While Nadella has emphasized AI for most of his tenure, its role was not guaranteed and came after years of careful planning that led to a close partnership with ChatGPT maker OpenAI. (OpenAI pays The Associated Press an undisclosed fee to license the news archive).

“Historically, if you’re a great startup that did something amazing, Microsoft wasn’t really your first choice,” Lenschow said. “So the fact that he got OpenAI to commit to Azure was an amazing champion … it gives him a huge competitive advantage over Google and Amazon.”

That position was jeopardized late last year when OpenAI’s board suddenly fired CEO Sam Altman. A weekend behind the scenes and a threatened mass walkout by Nadella-backed workers helped restore Altman and stabilize the startup, which wooed customers and shareholders. “He treated it like he was playing in the World Series of Poker against little kids,” Ives said.

ONGOING CHALLENGES

Nadella’s tenure has not been smooth sailing, especially given how much of the world is so heavily dependent on Microsoft products — sometimes to the frustration of the people who use them.

Cybersecurity experts say it tends to sacrifice security for convenience, including the gung-ho rollout of big AI models. The company’s trademark suite of work tools, Microsoft Office 365, has also been successfully infiltrated in recent years in embarrassing, high-profile compromises that have given Russian and Chinese cyber operatives access to the email accounts of senior US officials and members of Microsoft’s senior management team. .

It began providing cloud services to Ukraine just before Russia’s 2022 invasion, but networks serving NATO allies are constantly riddled with intrusion attempts. This and the worsening scourge of ransomware have prompted Nadella to call for a cyber Geneva agreement with Russia and China.

Despite Nadella’s stated aversion to “competitive fire,” Microsoft is once again drawing the kind of anti-competitive scrutiny that dogged Gates and Ballmer in earlier years. Nadella’s confident testimony at a federal court hearing last summer helped a judge not block Microsoft’s purchase of video game giant Activision Blizzard, but the company now faces a new round of questions about its partnership with OpenAI.

None of those challenges are likely to push Nadella, 56, who earned $48.5 million in total compensation last year and has also served as Microsoft’s chairman through 2021, out of his leadership role.

“From what I can gather, he’s really enjoying himself,” Lenschow said. “We live in very, very, very interesting times. I expected him to stay for a while.”