Nadella said that developers should be looking for something more practical rather than achieving artificial general intelligence (AGI) milestones.

In a conversation with podcaster Dwarkesh Patel, Nadella stated, "Us self-claiming some AGI milestone, that's just nonsensical benchmark hacking."

He advocates evaluating AI's effectiveness by contributing to a nation's gross domestic product (GDP), suggesting that AI should drive significant economic growth comparable to the Industrial Revolution.

Nadella highlighted the necessity for AI to discover a transformative application, akin to email or Excel's impact on productivity. He pointed out that while AI has the potential to revolutionise knowledge work, it has yet to find its "killer app" that would fundamentally change business processes and workflows.

Despite Microsoft's substantial investments in AI, including partnerships with companies like OpenAI, Nadella has expressed caution regarding the current AI hype.

He compared the enthusiasm surrounding AI to the dot-com bubble, emphasising the importance of focusing on real-world applications that deliver measurable economic benefits.

In line with this cautious approach, reports have emerged that Vole has cancelled leases for several AI data centres in the United States, possibly due to an oversupply of capacity and uncertainties in AI demand.

Analysts suggest this move reflects a strategic reassessment of infrastructure investments in response to evolving market conditions.