Gurley contrasts past Microsoft dominance with today's five to seven competing monoliths creating more startup opportunities.
“When I got into venture, every startup presentation ended with what are you going to do when Microsoft does this? Right.”
Gurley believes government restricting Microsoft opened the door for Facebook, Google, and Amazon.
“If they had been able to tie the browser to search the way they did, the way they went after Netscape aggressively, I think they would have succeeded. They're really good at that stuff.”
Gurley believes Microsoft antitrust restrictions enabled Facebook, Google, and Amazon to emerge as dominant platforms.
“I actually believe in my heart of hearts that the government restricting Microsoft's ability to leverage their way through the browser, open the door for Facebook, Google, Amazon.”
Gurley notes Microsoft hands out $11 billion annually in RSUs, giving them advantage in recruiting AI talent.
“So that's over 11,000,000,000 a year. And this morning we woke up and read about them taking some employees from a hot AI company in the valley.”
Gurley notes Microsoft hands out over 11 billion dollars annually in RSUs to compete for AI talent.
“And when you're handing out 11,000,000,000 a year in RSUs, you know, you've got a lot to play with.”
Gurley critiques Microsoft's near infinite memory phrase as semantically meaningless oxymoron.
“Mustafa at Microsoft dropped the phrase near infinite memory. Now I putting near next to the word infinite, I think is a bit of an oxymoron.”
Gurley calls the Microsoft-OpenAI deal one of the most complex deals of all time.
“The deal between Microsoft and OpenAI, as it's been reported, once again, I've never seen it. Sounds like one of the more complex deals of all time.”
Gurley notes uncertainty around whether Microsoft will convert OpenAI profit rights to equity.
“And so they also we don't know. You know, it it sounds like OpenEye wants them to convert to equity, and we have no idea whether they're willing to do that or not.”
Gurley says the Microsoft-OpenAI deal with $90 billion profit rights is one of the most complex ever.
“The deal between Microsoft and OpenAI, as it's been reported, once again, I've never seen it. Sounds like one of the more complex deals of all time. They have profit rights up to, like, $90,000,000,000.”
Gurley notes Microsoft has profit rights up to $90 billion, unprecedented in any prior deal.
“They have profit rights up to, like, $90,000,000,000. No one's ever signed a piece of paper like that before.”
Gurley argues most big companies that experience extended degrowth never return to glory, making Nadella an outlier.
“I think it's hard to put what Satya has accomplished in context because it's such an outlier To to go most companies, once they get big and have had an extended period of of degrowth, like where they really slow down, they never come back. Like, never they never get back to glory.”
Gurley says Nadella diagnosed Microsoft as a know-it-all culture and transformed it into a learn-it-all culture.
“And he said, he told everyone we're gonna change it from a know it all culture to a learn it all culture.”
Gurley warns Microsoft and Google's AI investments may repeat IBM's mistake of empowering a future competitor.
“I don't think they're dependent on the partner anymore, and it harkens back in my brain to IBM letting Microsoft put the OS inside their PC.”
Gurley cites Dan Gilbert who became more known for side hustles than core jobs, creating Microsoft Garage as example.
“In almost every case, he ended up becoming known more for the side hustle than the core job.”
Gurley explains Microsoft's OpenAI deal involves cashless revenue through cloud credits for equity.
“So you get equity for credits and then those credits are used to run workloads on Azure. That is cashless revenue for Microsoft.”
Gurley argues Microsoft's late nineties regulatory threat enabled Amazon and Google to emerge.
“I think that had Microsoft not been under threat in the late nineties, you may not have seen Amazon or Google or a lot of companies you may not have seen.”