Microsoft's real supply constraint today is power and the ability to build out data centers fast, not a shortage of chips — chips are actually sitting in inventory unable to be plugged in.
Satya says Microsoft's bottleneck isn't a shortage of GPUs but the inability to get power and facilities built fast enough to plug chips in. ✦ AI generated
Satya Nadella · BG2 Pod · 2025-10-31 · original ↗
starts at this moment · 18:21
“It's almost a non-existent chance that you have excess compute over the next 2-3 years?”
the biggest issue we are now having is not a compute glut, but it's a power and it's sort of the ability to get the builds done fast enough close to power. So, if you can't do that, you may actually have a bunch of chips sitting in inventory that I can't plug in. In fact, that is my problem today, right? It's not a supply issue of chips.
verbatim transcript · starts at 18:21
18:21is What's the secular trend? The secular trend is what Sam said, which is at the end of the day, because quite frankly, the the biggest issue we are now having is not a compute glut, but it's a power and it's sort of the ability to get the builds done fast enough close to power. So, if you can't do that, you may actually have a bunch of chips sitting
18:41in inventory that I can't plug in. In fact, that is my problem today, right? It's not a supply issue of chips. It's actually uh the fact that I don't have warm shells to plug into. And so how some supply chain constraints emerge tough to predict uh because the demand is just going you know is tough to predict right I mean I wouldn't you it's not like Sam and I would want to be
19:03sitting here saying oh my god we're less short on compute it's because we just were not that good at being able to project out what the demand would really look like. So I think that that's and by the way the worldwide side right one it's one thing to sort of talk about one segment in one country but it's about you know really getting it out to everywhere in the world and so there
19:22will be constraints and how we work through them is going to be the most important thing it won't be a linear path for sure there there will come a glut for sure and whether that's like in two to three years or five to six I can't tell you but uh like it's going to happen at some point probably several points along the way like this is there's something deep about human
19:41psychology here and bubbles and also as Satia said like there's it's such a complex supply chain weird stuff gets built the technological landscape shifts in big ways so you know if a very cheap form of energy comes online soon at mass scale then a lot of people are going to be extremely burned with existing contracts they've signed it I if if we can continue this unbelievable reduction in cost per unit of
20:08intelligence let's say it's been averaging like 40x X for a given level per year. You know, that's like a very scary exponent from an infrastructure buildout standpoint. Now, again, we're taking the bet that there will be a lot more demand as that gets cheaper, but I have some fear that it's just like, man, we keep going with these breakthroughs and everybody can run like a personal AGI on