Satya Nadella pushes AI focus as Microsoft cuts 6,000 jobs, more in July

Satya Nadella Calls for AI With Purpose Amid Job Cuts at Microsoft

As artificial intelligence continues to revolutionize the tech industry, Microsoft CEO Satya Nadella has issued a stark reminder: AI must solve real-world problems to justify its massive energy consumption and social impact.

Speaking at Y Combinator’s AI Startup School, Nadella emphasized the need for responsible innovation. “If you're going to use energy, you better have social permission to use it,” he said. “We can't consume energy unless we're creating real social and economic value.”

Microsoft is one of the world’s largest developers of AI infrastructure, and the stakes are high. A 2023 Clean View Energy report estimated the company consumed 24 terawatt-hours of electricity—roughly what an entire small nation uses in a year.

Nadella believes AI must be judged by how it improves daily life—streamlining healthcare, education, and bureaucracy. He cited the U.S. healthcare system as a key area for AI to drive efficiency, using hospital discharges as an example where AI could cut delays and reduce costs.

Despite this optimistic vision, Microsoft’s AI-led transformation has also come with human consequences. The company has laid off more than 6,000 employees in the past year, attributing the cuts to “organizational changes” driven by AI and automation.

Now, reports suggest a fresh round of layoffs may hit the Xbox division as Microsoft nears the end of its financial year. If confirmed, it would be the fourth major job cut in 18 months, with the company under pressure to cut costs following its $69 billion acquisition of Activision Blizzard.

Microsoft, alongside its AI partner OpenAI, is doubling down on its ambitions in AI and gaming. Yet this push for innovation raises ethical questions about workforce disruption and the environmental cost of AI development.

Meanwhile, competitors are racing ahead. Meta is reportedly in talks to acquire AI voice startup PlayAI and recently hired OpenAI researcher Trapit Bansal to join its Superintelligence team. Google’s DeepMind, too, unveiled AlphaGenome, an AI designed to decode the effects of DNA changes on human health.

In the end, Nadella’s message is clear: building the future with AI must come with purpose, not just profit.