Microsoft CEO Satya Nadella has cautioned that some of the company’s most established businesses may lose relevance as artificial intelligence reshapes the technology industry. Speaking at a recent employee town hall, he admitted being “haunted” by the story of Digital Equipment Corporation (DEC), once a dominant force that declined after failing to adapt.
Nadella stressed that Microsoft must transform not only its products but also its culture, values, and work environment. He highlighted the importance of retaining top talent, encouraging agility, and fostering empathy across the organization while preparing for rapid AI-driven changes.
He also warned that even long-profitable areas, including productivity tools and legacy software, could come under pressure as AI automates key functions and redefines workflows. According to him, the company must avoid complacency and focus on building future-oriented capabilities rather than relying solely on past successes.
Addressing employee concerns, Nadella acknowledged that the workplace atmosphere had grown colder and more rigid. He assured staff that leadership is committed to rebuilding trust, strengthening morale, and steering Microsoft toward sustainable innovation in the AI era.
