Under an uncharacteristically sunny Pacific Northwest sky last week, hundreds of Microsoft employees filed into a hangar-like structure on the company’s sprawling Redmond, Washington, campus to celebrate a half-century of software dominance.
Emceed by actor Brenda Song, the 50th anniversary event gathered Microsoft’s three CEOs—Bill Gates (1975–2000), Steve Ballmer (2000–2014), and current chief Satya Nadella—in a rare joint appearance to reminisce about the last five decades.
The company also devoted a large portion of the event to hyping up its consumer-focused Copilot product, in an effort to place generative AI as the next big chapter in its evolution.
“Now, the frontier is intelligence, so it’s incredible to see in the demos that we got today how we’re on the verge of something even more profound than what came for those first 50 years,” Gates said on stage.
The event spanned testimonials from Copilot power users, game show segments featuring Microsoft trivia, and talk show-style interviews with the CEOs—as well as two interruptions from activist employees who protested Microsoft’s sales of cloud and AI products to the Israeli military.
From humble beginnings in an Albuquerque garage to its current reinvention as a cloud and AI leader, the software giant has seen plenty of highs—Windows dominance, a successful push into gaming, its OpenAI partnership—as well as lows, including a landmark antitrust case and misjudged forays into mobile.
Look forward: At the event, we caught up with Yusuf Mehdi, EVP and consumer chief marketing officer, about the strategy behind the company’s next era, and learning from the past.
“A big part when we talked about this 50th celebration of the company’s existence, we said we don’t want this to just be looking backward,” Mehdi told us. “The company’s whole ethos is about…going forward. And so Copilot and this notion that AI is the next era and the future was a great juxtaposition.”
OpenAI omitted: One name that was notably absent from the celebration: OpenAI, the startup whose strategic partnership with Microsoft initially kicked off its AI-centered chapter. The omission came amid reports that Microsoft is developing its own foundational models to lessen its reliance on OpenAI’s GPT family.
Mehdi said the partnership with OpenAI remains strong, but acknowledged that there are areas in which the two compete, including Copilot and ChatGPT.
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“We still have a super, super strong partnership with OpenAI, and that partnership is going great,” Mehdi said. “There are things obviously we are deeply aligned and partnered on, and then there are areas where we compete. And the competition is obviously with ChatGPT and Copilot. But we partner a lot on the use of Azure, building the supercomputer behind it. And I would say it’s going well. I mean, their success is our success as a company.”
Getting emotional: While Microsoft has been out ahead on the AI race through its cloud dominance and early backing of OpenAI, Copilot is now one among many products in a crowded consumer chatbot market.
Mehdi named a few key strengths of Copilot for consumers: One is a focus on emotional intelligence that Microsoft AI CEO Mustafa Suleyman brought from his startup, Inflection. Another is differentiation between the consumer and enterprise products—Copilot is friendlier and simpler to use, while enterprise is “feature-rich” and secure.
“If you’re ChatGPT or Gemini, it’s one tool. One size fits all. And they’re all really caring a lot about the business market because that is where they’re trying to build more capability,” Mehdi said. “In the business market, there’s a little less of an interest in having a bunch of emotional support.”
Mehdi also sees Microsoft’s lack of existing focus on search ads as an asset that allows the company to think more outside the box with eventual Copilot advertising. Mehdi said the company is still in the early stages of experimentation there.
Lessons learned: As far as what Mehdi takes from Microsoft’s history when it comes to this next era, he said one big lesson is the need to build customer and developer ecosystems around products.
“Real success comes when people, other people, benefit from the work—not only the people you’re serving, but then the developers who want to serve those individuals,” Mehdi said. “And I think that’s really what it’s about for us…are we creating that ecosystem of people that are benefiting on top of Copilot? And we’re in a hunt for that.”