Bill Gates continues to 'backstage' manage Microsoft despite official departure, as Satya Nadella relies on his advice for Microsoft's transformative AI initiative

 Bill Gates.
Bill Gates.

What you need to know

  • A new report indicates that Microsoft co-founder Bill Gates is still intimately involved in the company's affairs years after stepping down from the board to focus on philanthropy.

  • Gates' advice is reportedly treated as gospel, and he also played a crucial role in fostering Microsoft and OpenAI's partnership, and consequently, the success witnessed in the category.

  • Gates actively takes part in the recruitment of high-ranking executives at the firm, reviews new products, and more.

Microsoft has enjoyed great success since it started dabbling in AI and integrated its fully-fledged AI-powered assistant, Copilot across most of its products and services. The tech giant is now the world's most valuable company with over $3 trillion in market capitalization.

The tech firm's multi-billion dollar investment (recently mistaken as an acquisition of ChatGPT-maker company) and extended partnership with OpenAI has 13 market analysts unanimously voting that Microsoft will be the world's most valuable company in the next five years ahead of Apple. Some have indicated Microsoft is on the verge of reaching its iPhone moment with AI with the company's latest earnings report building on this premise.

The immense success Microsoft currently enjoys is often attributed to the company's early lead and investment in AI coupled with Satya Nadella's impeccable leadership skills. But as it turns out, there's more to the story than Microsoft lets on.

To the public eye, Microsoft co-founder and former Bill Gates left the firm's board of directors to focus more on his philanthropic efforts at the height of the COVID-19 pandemic. However, according to a report by Business Insider, the former CEO is still involved in the company's affairs and has been the muscle behind its AI efforts.

Per sources familiar with the matter, Bill Gates is still 'intimately' involved in Microsoft's operations and strategies and is often a part of the recruitment of high-ranking executives at the firm, reviews new products, and more. More importantly, Gates' contributions have heavily impacted Microsoft's relationship with OpenAI, however complicated it might be.

According to one of Microsoft's top executives:

"What you read is not what's happening in reality. Satya and the entire senior leadership team lean on Gates very significantly. His opinion is sought every time we make a major change."

Microsoft CEO Satya Nadella took over the company's leadership from Steve Ballmer but had been working there since 1992. Satya started his humble beginnings at Microsoft as an Excel product demonstrator. He quickly climbed the ranks at the company and ultimately rose to the top seat but saw himself as an "internal stranger" and even admitted that he never thought "someday Microsoft would have neither Bill nor Steve."

Microsoft CEO heavily relies on Bill Gates for technical advice

Microsoft CEO Satya Nadella
Microsoft CEO Satya Nadella

Upon his appointment as CEO, Satya often turned to Gates for advice. He reportedly asked Gates to set aside 30% of his time to serve as a technical advisor for Microsoft. Satya and Gate's professional relationship continued to thrive beyond the latter's departure from the company's board in 2020.

During Gates' departure from the company, Satya praised him for his contributions and promised that the company would continue to profit from his technical advice and passion. But this tone quickly changed in 2021 while Gates and Melinda were in divorce proceedings. At the time, Gates had reportedly been forced to step down from the company for having an affair with an employee. The situation worsened when several female employees highlighted Gates' misconduct, including asking them out. It is at this juncture that Satya seemingly distanced himself from Gates.

And while Microsoft CEO Satya Nadella's relationship with Bill Gates seemed broken, this wasn't the case. It's reported that Satya continued to rely on Gates for his technical advice and knowledge, which has heavily impacted the company's direction and AI advances.

Was Bill Gates the key ingredient that fostered the Microsoft-OpenAI deal?

Microsoft and OpenAI logos
Microsoft and OpenAI logos

While Microsoft's CTO Kevin Scott brokered the Microsoft and OpenAI partnership in 2018, it's reported that Bill Gates had been meeting up with the ChatGPT-maker from as early as 2016. As such, it's believed that he played an important role in the partnership.

Gates is also rumored to have challenged OpenAI and its CEO, Sam Altman, to create an LLM with the capability of passing an advanced Biology test. At the time, Gates didn't believe it was possible, but it was indeed. Interestingly, OpenAI's Sam Altman debuted GPT-4 outside Gates' residence in 2022 where he'd been having dinner with the billionaire and Microsoft CEO Satya Nadella. Gates indicated it was "the most stunning demo I've ever seen in my life."

Gates skillfully curated Copilot's plot

Microsoft Copilot
Microsoft Copilot

Before Microsoft and OpenAI forged their tech bromance, Bill Gates shared an internal memo with Satya Nadella alongside top executives at the company. While vague, it talks about "AI agents" designed to help satisfy your wants and needs, but are more powerful than your basic voice assistant.

Agents are not only going to change how everyone interacts with computers. They're also going to upend the software industry, bringing about the biggest revolution in computing since we went from typing commands to tapping on icons.

After Altman debuted GPT-4, Gates shared another memo highlighting several ways the technology should be leveraged to make work easier, including reading and summarizing your emails and more. Gates believed that the model trained using the information on the internet was the beginning of a new era with personal AI agents.

Sources with close affiliations to Microsoft detailed Gates' words and advice were treated as the gospel. Consequently, Satya Nadella challenged his team to integrate AI across its wide portfolio of products and services, including cybersecurity, Microsoft 365, etc.

Microsoft spread its AI glory to its seemingly dead search engine, Bing, ultimately placing it on an even playing field to potentially compete with Google. Microsoft CEO has indicated that Google doesn't play fair with Bing. However, supercharging the search engine with AI doesn't seem to have any major impact on Google's search market share. However, it recently surpassed 140 million daily active users after the EU antitrust watchdog gave the service and Edge a pass on DMA rules since they aren't dominant enough in the digital markets.