• by Laurie Sullivan  @lauriesullivan, October 25, 2024

Microsoft CEO Satya Nadella’s 2024 letter to shareholders, highlighted in the company's annual report, describes an important year in the company's history in terms of financial motivation and innovation -- as it strengthens its path in AI, integrating everything from software to advertising.

The company, founded by Bill Gates and Paul Allen, turns 50 in April 2025.

In the letter, Nadella emphasized how Microsoft has remained relevant by continually reinventing itself. “We moved from talking about AI to helping our customers translate it into real outcomes - one person, one organization, one institution, and one country at a time,” Nadella wrote in the letter.

Providing examples from companies in areas ranging from banking, education and healthcare to retail, Nadella described how supermarket chain Coles generated 1.6 billion daily AI predictions across 850 Australian stores, ensuring every shopper finds what they need.

Unilever performs thousands of simulations with AI in the time it would take to run tens of laboratory experiments, as it accelerates its product development. In Brazil, Itaú, the country’s largest private bank, saw significant coding efficiency gains through Microsoft’s GitHub Copilot.

The letter describes the company's advertising on LinkedIn and Xbox, as well as the development of Copilot and the steps taken to create an AI companion.

Soon Copilot will have advanced capabilities such as voice and vision that make it more useful and natural to use.

The goal is to apply new approaches to the ways that people search and browse, but Copilot in the Microsoft Ad Platform also helps marketers create campaigns and troubleshoot ideas using natural language.

Microsoft’s push into AI and cloud technology has paid off this year in financial performance. The company reported a 16% increase in year-over-year annual revenue of $245 billion. Nadella attributed the success to advancements like Secure Future Initiative (SFI), AI innovation across its product portfolio, and managing costs to generate long-term growth.

“We are focused on continuous improvement across everything we do,” Nadella wrote.

The letter shows that analysts have tied Microsoft’s value to innovations and investments in AI. The company’s stock rose approximately 28% this year, and on Thursday had a $3.16 trillion market cap.

Trust and transparency have been top of mind as the projects grow and expand. In May, Microsoft published its first AI Transparency Report, which outlines how the company builds generative applications responsibly and supports customers. It also released Goals and Governance: Goals and Lessons for AI that draws on lessons from other globally governed technologies like civil aviation and nuclear power. 

The future of innovation and AI resides in safe experiences. “To bolster our efforts to prevent child sexual exploitation and abuse risks, we have made new commitments to safety by design in our AI services, joined the Tech Coalition’s Lantern Program, and proposed concrete actions that U.S. policymakers can take to protect the public through regulatory and policy measures,” Nadella wrote.

He closed the letter with a personal anecdote and a wish to translate technology into power. Two years ago, he met an Indian farmer who was able to apply for complex government farm subsidies using just his voice, thanks to an app built with GPT 3.5.

“It was remarkable,” he wrote. “A frontier model developed on the West Coast of the U.S. just months earlier was being used to directly improve the lives of rural farmers on the other side of the globe.

That rate of diffusion was unlike anything I had seen in my career. And the pace has only increased. Earlier this year, I was in Thailand, where I met developers using Phi-3 to optimize their operations just days after the small language model was released.”

Nadella said these events represent a true democratization of expertise, where the internet era puts information at the fingertips of many and AI puts expertise at just as many fingertips.