Overview

• At a recent employee town hall, Satya Nadella invoked Digital Equipment Corporation as a cautionary tale, saying he is haunted by the risk of obsolescence.
• Nadella said some long-standing categories Microsoft has built over decades may no longer matter and that he is prepared to cut losses if products become redundant.
• Employees report low morale after multiple 2025 layoff waves, and Nadella acknowledged a colder culture and pledged to rebuild trust and empathy.
• Microsoft remains committed to roughly $80 billion in AI data-center spending as it reorients products and roles toward AI.
• The OpenAI relationship remains strained as OpenAI seeks a for-profit structure and more compute than Microsoft has provided, with the two companies operating under a new non-binding memorandum of understanding.