# Nadella’s OpenAI bet helped validate Azure

Markdown copy of https://realalpha.app/s/nadellas-openai-bet-helped-validate-azure/ on Real Alpha, the best minutes from long interviews with the people building AI. Cite and link the page, not this copy.

- Speaker: [Reed Hastings](https://realalpha.app/people/reed-hastings/) · Reed Hastings is cofounder and former CEO of Netflix. · Co-founded Netflix and led it as CEO, then became majority owner and chair of Powder Mountain.
- Host: [Reid Hoffman](https://realalpha.app/people/reid-hoffman/) · Co-founder, Manas AI · Co-founded LinkedIn; one of OpenAI's first investors; Greylock partner.
- Show: Possible
- Episode: [Reed Hastings: From Building Netflix to What Comes Next](https://realalpha.app/v/2qoGbd9d2yA/), Apr 22, 2026
- Moment: 11:54 to 14:30 of the episode (3 min), playing on https://realalpha.app/s/nadellas-openai-bet-helped-validate-azure/; the episode from there: https://realalpha.app/v/2qoGbd9d2yA/?t=714

## Quote

> “Satya made one incredibly ballsy, insightful decision, which is to **invest in OpenAI** back in 2018.”
> — [Reed Hastings](https://realalpha.app/people/reed-hastings/) at [13:28](https://realalpha.app/v/2qoGbd9d2yA/?t=808) · Possible

## Takeaways

1. Office stayed strong while Windows and Bing struggled.
2. AI workloads became a major driver for Azure.
3. Nadella invested in OpenAI in 2018.

## About this segment

Reed Hastings credits Nadella’s OpenAI investment with giving Azure a major AI workload. He also points to Microsoft’s durable Office business and improved internal collaboration.

From “Reed Hastings: From Building Netflix to What Comes Next”, Apr 22, 2026. [Watch the full episode](https://realalpha.app/v/2qoGbd9d2yA/)

## Transcript

Transcribed by machine (Whisper) from the episode’s audio, so a word may be off here and there.

[11:59](https://realalpha.app/v/2qoGbd9d2yA/?t=719) But I want to go back to the Microsoft. So you were there before me. I joined in 2017, actually called you and, as usual, got advice on the stuff. What do you think, speaking of long trajectories, you know, Satya has done a great job at Microsoft. So what do you think the things were the right setup for Satya doing that? How much of that's, you know, kind of Satya's own brand of things and how much of that's kind of the patterns of work that were?

[12:30](https://realalpha.app/v/2qoGbd9d2yA/?t=750) already present at Microsoft. Well, let's think about why is Microsoft 10, 15 times more valuable than when he started? You know, the profit stream has continued to grow, but then it grew a lot before that under Steve Ballmer. And so offices stayed a very strong franchise and they have withstood, you know, some erosion from Google, but there was no wholesale change. Okay. So they kind kind of won the office wars and they've made office good enough that, you know, fewer people are switching. So they stabilize that. Windows didn't particularly get stabilized. You know, Apple in particular has continued to grow in the face of Apple. Search has continued, Google search has continued to grow. So Bing and all those. And so like Windows and Bing, you know, haven't really delivered. Azure has delivered in a big way. It's delivered in a big

[13:26](https://realalpha.app/v/2qoGbd9d2yA/?t=806) way because of the AI workload. Okay. That's the big validating workload. So then that comes back to Satya made one incredibly ballsy, insightful decision, which is to invest in OpenAI back in 2018. I thought you were going to say buy LinkedIn, but that's okay. So, you know, he bet big on AI and that catapulted them both reputationally and in terms of other, a little bit on the prop and the Azure business. So it was the workload that has grown Azure into a monster and a big success.

[13:59](https://realalpha.app/v/2qoGbd9d2yA/?t=839) Because Amazon had their own first party workload plus all the early adopters. So it was really hard for Azure for a while. Early adopters like Netflix. That's right. So where such it gets incredible. He also, internally, he just got people talking and working together more than Steve had been able to do. But that, I mean, again, IBM was a nice place to work, but they just didn't take any product bets that really delivered. And Satya