Microsoft (NASDAQ:MSFT) CEO Satya Nadella is reportedly set to revolutionize the company’s business model for the AI era, similar to what the software giant did with the cloud, and he has appointed a key executive to lead this transformation.
Nadella Wants To Replicate Cloud Success
Nadella has chosen Rolf Harms as an advisor for AI economics to help execute this ambitious plan, reported Business Insider on Wednesday, citing an internal memo.
Harms, who played a significant role in Microsoft’s cloud reboot 15 years ago, authored the influential white paper “Economics of the Cloud” in 2010. This paper was a turning point for Microsoft’s cloud computing success, reshaping the company’s business models and justifying its investments in large-scale cloud services.
Nadella says AI needs a similar reboot, and has broadened Harms' role so he can guide Microsoft's top leaders on navigating AI's new economics, from infrastructure to platform tech and applications.
Microsoft did not immediately respond to Benzinga‘s request for comment.
Microsoft Maps Out a 50-Year AI Plan
This move by Nadella comes in the wake of Microsoft’s 50-year AI plan and a stark “winner’s curse” warning. The company’s long-term AI vision was unveiled by Nadella and Cloud & AI chief Scott Guthrie inside the Fairwater 2 datacenter, marking a significant strategic roadmap.
Earlier, Nadella had also highlighted the real bottleneck for AI — not a shortage of advanced GPUs, but the fundamental physical infrastructure required to power them. This insight came amid a massive new strategic partnership with AI startup Anthropic, valued at approximately $35 billion.
AI firms are under pressure to justify their huge infrastructure bets, especially after Microsoft briefly slowed its AI spending earlier this year. But the company has since renewed its aggressive push with major new deals involving OpenAI and Anthropic.
Benzinga's Edge Rankings place Microsoft in the 73rd percentile for quality and the 99th percentile for growth, reflecting its strong performance in both areas. Check the detailed report here.
Price Action: On a year-to-date basis, Microsoft stock surged 16.37%, as per data from Benzinga Pro. On Wednesday, it fell 1.35% to close at $487.12.
READ NEXT:
Image via Shutterstock
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
© 2025 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
