From Innovation to Infrastructure

To kick us off, um, I'd like to welcome Mette Kaagaard on stage with me, uh, CEO of Microsoft. So, I'm really bad at introducing people when they can do a much better job of it themselves. But, you know, you're an engineer, you've led various companies through like change management, and now you're sitting within Microsoft, kind of seeing this big change from the inside. And I'm just wondering first and foremost, what does it feel like to be kind of in one of the companies that's feeling this change of AI more than anyone else? Yeah.

So I started as CEO of Microsoft in Denmark three years ago and um 1 of January actually 2023 and it was not in my contract that AI was going to you know work and and and pays off as it has been. So one month before I started ChatGPT went on the internet and the world just changed and I've been on a kind of a rocket I will say on AI ever since. So it's it's a strange you can say combination of both having your own organization going through all of this change really adapting all of this while bringing it to the market and all the customers that are asking for you know how can we work with this and what should we uh what should we do with this and then it's also seeing because I think what happened in the beginning was that everybody somehow all of a sudden understood how this could work right everybody tried it I guess you did as well and it didn't seem as technical, you know, it was just a totally other user interface that we had ever seen for something that, you know, a month ago was super technical. Then all of a sudden I knew how to do it and I could just use it. I didn't have to call any IT people.

It just worked. So it went from being a discussion in the IT department to the board. But then what happened was then the board discussed and then when we start to implement it went back to the IT. So I think that what you talk about here today that this is leadership, this is strategy, this is organization. It's extremely important and that is actually I think what I have been struggling a bit with also with the customers and what probably also makes some of you a bit confused uh is that this is not a technical thing.

It's a super business critical and strategic thing and and you should just think of it like that. Yeah, I think many people in the room are coming at this from various perspectives. So we have as a family office often many different hats to wear. So the one would be as a as an operator of our own operations as an office. Another one as an investor.

So in various technologies that might be emerging might be impacting uh or might be impacted by AI. And then the third would be a lot of these offices still have operational businesses. So it's kind of three different lenses that might need different perspectives on top of this. How how should people think about it like that? So I think uh if we go back to the 1970s then the OECD uh came up with something they called the frontier firms and they what they were using this for was trying to find in the different industries what were the companies you know what were the characteristics of the companies that actually won in the different industries.

So it was like you know who were the most innovative, who was you know earning the mo most, who was growing the most, who was attracting the best talents and I think we should think of AI as you know the lever for being a frontier company in the future and that just goes for all the levels. So it goes for me as a leader. I need to use this very much in my daily work in order to understand what this is and how it can be utilized. It goes for how do I bring my organization and the business I do on board into this? How do I bring the customers that I serve on board uh into this?

And then of course, you know, the companies that I look to invest in, you know, where are they on this journey? And and what are the perspectives that they work with on this journey? Do they have big levers uh where we can see that AI can really really do a big difference for how they do uh how they do work? So it I think you just need to really take it into the half. This is going to be everywhere uh in a few years.

It's really going to be everywhere and that's how you should see it. You should use it should use in the companies you are have an operating responsibility for. You should look for it when you go for investments. So it sounds like you believe that AI is not just going to be become a tool but it is actually part of that infrastructure. It's part of like everything.

It's going to be in the DNA of every companies and also a little bit on how we actually work in our free time and what we do now. So it's it's not a tool. It's and that's why I start mentioning the frontier firm. It's simply going to be how you operate. So like email something like that core infrastructure.

It's part of your everyday day-to-day tools. Is there is there anything that we have today already like the OECD? You mentioned that study. Is there something that what does good look like in terms of AI for companies like these? So I think first of all uh good look like good good looks like that you understand this is a leadership this is a leadership task it's a strategic task it's something you need to integrate in all of the processes and and how you work.

So that's you know the mindset you can say of how you actually go into this. Then there's how do you start and how do you progress and what we see works very well is that the companies where you start giving all of your employees a kind of a digital assistant start with that you get the capabilities in place you get everybody to understand what this can do you start freeing up resources because that's what happens when you give people this and then look to your customer side and find out how can I actually interact with my customers in a totally different way that I have been doing until now by giving them, you know, a way into my company and a a much easier path to get the information, the service, whatever it is that they need. Again, freeing up resources in that part of the company. and then using this extra sort of uh capacity that you get in order to think okay you know then which processes do I have that I can really automate where I can somehow really change because if you if your customers all of a sudden can use AI to interact with you you can all of a sudden deliver service 247 all days a week you free up you know you free up resources maybe there should be a little bit more selling then what do they need in order to do that that maybe requires new processes. So these steps into going from something that is just delivering a little bit of more of a productivity game which has an end.

We all know that right? At some point you cannot get it any further. But then go into the more innovative space and really find out okay you know then what how can we work with this? How can I do new products? How can I do new services?

How can I deliver what it is that I deliver to my customers in a totally different way than normal. So if we talk about infrastructure, I think from a Microsoft perspective, you're sitting obviously in a space that has a very specific perspective on this, you know, various places in the stack from data centers to models to, you know, providing the tools and the platforms on top of that. It feels like a lot of this power is busy concentrating within a couple of large players today. Is that the way that infrastructure works or how should we think about that? especially adding another layer on top of this, you know, being European maybe with an American company.

Uh maybe there's a lot of talk around sovereigntity of this data. Um I'm a little bit confused about that. So I actually think that right now it is a space with quite a lot of competition and that's at least what we feel. Uh but you're right there is a race to get the socket at the companies just to be very honest and transparent about that. Erh because if you if you have the socket you can also move it up in the stack right so we deliver productivity gains for all the employees we deliver some you pay for we deliver some which is for free simply to get the full socket and the others do the same but there's a lot of competition in this space and that is of course one thing to be very aware of so that is a lot of competition so I'm not and it might be concentrated on a few that's what we have seen until Now why we have three very big cloud providers we have you know it's not like there are 15 people or 15 companies for all of the different technologies that we have so we probably see some concentration but there is a lot of competition right now then I think it's not only an infrastructure game because what this also is it's a way to innovate much faster than you have been able to do beforehand because you have a lot of transactional systems at least in the operating companies that you work with.

And this is actually a way to interact with the data in all of these systems without changing them, but changing the processes around how you utilize them. And this is not expensive technology to actually build. It really is not. So there's it's it's yes, it's infrastructure because it's how everybody works and it's in the processes, but it's simply also to free up how you look at your processes and a much faster way to do that than if you need to change your SAP system or if you need to change your dynamic system. And that can be expensive and takes forever, right?

But all of a sudden we have connectors and we can go in and we can get the data and we can do something different. Then there's the serenity piece. Uh you also ask uh for that and I have a dream that AI could be a stronghold for Europe to be honest if we do this right. So what we have been very good at in Europe uh in the years that has gone by is to build the solutions not the infrastructure. We're not been good at that.

That's American tech that that comes with the infrastructure, right? But the solutions on top, we have been really really strong in building them and that that delivers bargain power. I mean imagine SAP being shut down. There's a lot of American companies running on SAP software today, right? So it it's like you you move the needle and you move the power if we could really get that stronghold to work and be the ones delivering within healthcare.

There's going to be a lot of stuff in healthcare in this area within healthcare the solutions that are responsible and that can really drive you know how we deliver healthare in a totally different way than we have been doing until now just to mention one example. So I really dream of that we get this right in Europe and and that we get these kind of solutions hence the bargain power. Um but we need to be more on the technology front in Europe just to be also back to the sovereignity very honest on that because we we if you see how the economy grows and it grows faster in the in in the regions where we have these big tech companies. So we need more big tech companies in Europe in order to really uh get that. And I would love to dive into the topics of open source models as part of sovereignity, but I'm not going to do that because I see I'm being looked at there in terms of time.

But I think we had an interesting discussion just before coming in here and I going back to the setup for this room today. A lot of family offices wear different hats. So the hats of an investor with patient capital going into investing into this technology broadly various levels of course but I guess for this room if you think about investing how should investors be thinking about backing specific companies potentially you know we spoke about the quantum project what are those kind of opportun opportunities that you think would be relevant for especially a Danish perspective and especially from sovereignity and investing in European infrastructure. Sure. stronghold already uh in Europe and Denmark and please let's keep it that way.

Uh so that would be nice uh with investments coming that way and we already see Danish investments into this. We have the biggest quantum computer in the world is actually in Denmark right now and the Microsoft and Lumbu is the biggest Microsoft center for quantum research. So more than 100 people are working within quantum research in lumb and that of course fosters an ecosystem and a lot of companies popping up around that and yes there's some years out there but it's getting closer and closer uh so uh so I think you know if we want to support Europe uh that is really a good area to to look into and then back to my the ones delivering the solutions using the AI technology. So we see a lot of startups coming into this space. We also invest in startups in Microsoft.

We had 400 new startups coming out of our just in Denmark uh last year and we see them grow actually quite fast. But then al unfortunately they they leave for the US at a certain uh at a certain point in time due to the scalability and the investment environment uh over there. So maybe there's also a little bit of a political issue here that you might want to chip into that we simply need a better way to grow in Europe these companies than we uh than we have today. It it is an issue but so quantum and the companies within industries where I can see that they can really grow and where we have big issues with lack of people and lack of work done and healthcare is one of them and then AI uh in there in order to solve that. I would uh I would bet my money on that.

Thank you very much. I think we don't have much time for questions, but I'll take one question if we have any for me. Otherwise, you're welcome to share them afterwards as well. We have a Q&A running somewhere, but I can't see the board. So, uh there might be some questions.

If you shared something, we'll get back to it a little bit later. Thanks, man. You're welcome. Thank you.