“We need to rapidly…” Microsoft CEO Satya Nadella warns employees as Microsoft prepares for an AI-driven future

Satya Nadella

Microsoft CEO Satya Nadella has a clear message for his workforce: the company needs to move fast, rethink everything, and prepare for a world where AI agents — not humans — will increasingly be the primary users of software.

In a recent episode of the Dwarkesh Podcast, Nadella talked about a major shift underway at Microsoft. For decades, software companies have charged customers “per user.” But with AI rapidly becoming every company’s digital co-worker, Nadella says the old model simply won’t work anymore. Instead, Microsoft is beginning to think about pricing software “per agent.”

These “agents” are not employees — they’re AI systems that can plan tasks, take decisions, analyse data, and communicate on their own. And because these agents will be doing more work inside apps like Microsoft 365, Nadella says the company must rebuild its business model around them.

“Our business, which today is an end-user tools business, will become essentially an infrastructure business in support of agents doing work,” he explained. In other words, instead of humans using Word, Excel, Outlook or Teams, Microsoft expects AI agents to use these tools autonomously — and customers will pay based on how much work these agents perform.

This isn’t just a Microsoft-only idea. The entire industry is slowly moving in the same direction. Earlier this year, Business Insider reported that companies like ServiceNow are already experimenting with usage-based billing linked to AI workloads. As AI queries and tasks require more computing power, the traditional flat “per seat” pricing is becoming harder to sustain. ServiceNow CEO Bill McDermott even admitted, “When it goes beyond what we can credibly afford, we have to have some kind of meter.”

Large consulting firms are also embracing this shift. Deloitte and EY have launched agentic AI platforms that can generate reports, schedule tasks, and communicate with clients. EY says this could eventually lead to a “service-as-a-software” model — where companies pay for outcomes delivered by AI, not for human hours.

For Microsoft, this means its core products — like M365 — will evolve into the base infrastructure where AI agents live and work. You’ll still need places to store files, track tasks, search archives, and manage workflows, Nadella said, but much of the activity will soon be automated by AI.

Microsoft has already begun moving in this direction by offering a pay-as-you-go pricing option for its AI agents. Companies only pay based on the tasks their AI completes, while a basic Copilot chat experience stays free.

Other AI leaders like Anthropic and Google have also embraced usage-based pricing. As Nadella hinted, the next big growth engine won’t be the number of human users — but the number of AI agents working alongside them.