AI models are becoming commodity, says Microsoft CEO Satya Nadella

Nadella also added that AI agents, tools and technology are also important in the creation of a frontier success framework

Artificial-intelligence (AI) models are rapidly becoming commoditised and the next phase of differentiation will come from how companies orchestrate these capabilities to deliver real-world outcomes through AI agents, Microsoft Chief Executive Officer Satya Nadella said on Friday.

 

Nadella, who is in India on a four-day trip, part of the Microsoft AI Tour, was in Mumbai.

 

“There are lots of capable models available today. The question is how you bring those capabilities together,” he said.

 

According to Nadella, the real competitive edge will lie in what he termed “context engineering”, the ability to ground AI systems in enterprise data, workflows, and human relationships so that agents can reason, plan, and act with relevance.

 

 

“The performance of your AI application is directly correlated to how well your data is brought into context,” he said.

 

Nadella said the industry was moving beyond simple prompt-and-response interactions toward agentic systems that could autonomously carry out tasks across applications.

 

“Now we have agents. Think of Copilot, as a browser for the agentic web.”

 

He pointed to examples such as AI agents that could function as always-on research assistants, analyse large volumes of spreadsheets like a data science team, or iteratively improve outputs in tools such as Excel, mirroring how software engineers worked today.

 

“What happened in software development is going to happen in Excel, and accelerate it,” he said.

 

Nadella also added AI agents, tools, and technology were also important in the creation of a frontier success framework.

 

“The key thing for us is to find out the frontier of what is possible. When we talk about tech, it allows us to reimagine what we can now do.”

 

This allows individuals, state governments, enterprises, and organisations to reimagine how they operate. For instance, pharmaceutical companies can now explore if they can accelerate clinical trials and bring medicines faster to the market.

 

Nadella also unveiled MahaCrimeOS AI platform in partnership with the Maharashtra government to accelerate cybercrime investigation in the state.

 

The system will be rolled out in 1,100 police stations.

 

Microsoft, in collaboration with the state government and its MARVEL (Maharashtra Advanced Research and Vigilance for Enhanced Law Enforcement) initiative, is leveraging next-generation AI to tackle complex and evolving cybercrimes. 

MahaCrimeOS AI is built on Microsoft Azure OpenAI Service and Microsoft Foundr. The Microsoft India Development Center (IDC) worked closely with CyberEye and MARVEL to tailor the solution for real-world policing needs, standardising investigation workflows and ensuring secure, compliant deployment.

 

Nadella met Prime Minister Narendra Modi on Monday.

 

Microsoft also announced investing $17.5 billion in India between 2026 and 2029 to accelerate the country’s Cloud and AI infrastructure, skilling, and sovereign digital capabilities.