Share price multiplied in nine years: Microsoft's remarkable transformation
Microsoft has found a way out of a dilemma that paralyses almost every innovative company at some point. The success has to do with AI – and with one particular CEO.
What it’s about
Microsoft was long seen as the company that risked suffocating on its own size. Missed the mobile age, exhausted Windows, an ossified culture. Nine years later the company sits at almost $2.5 trillion in market cap and delivers, with the AI assistant Copilot, the most visible success of the current tech wave. Few turnarounds have been so thorough – and almost all the threads lead to one man: Satya Nadella.
The lever: growth mindset
When Nadella took over in February 2014, Microsoft’s internal culture bore the marks of Ballmer’s aggression. Nadella brought a different approach: “growth mindset”, a principle from psychology professor Carol Dweck. Always be ready to question assumptions. Always be learning. Nadella has elevated this to a leadership principle and prescribed it for his managers.
What Zain has to do with it
A key role in his stance is played by his son Zain, who was born with a severe brain injury and died in February 2022 at the age of 26. Nadella has spoken publicly about how his son’s experience shaped his leadership style. “The fact that I am the father of a son with special needs has shaped my personal passion and philosophy.”
The bet that changed everything
The biggest proof of the growth mindset came shortly after Zain’s death: the partnership with OpenAI. Microsoft had its own research arm working on similar models – and still chose to back a small San Francisco start-up. The bet paid off. ChatGPT became the fastest consumer-app adoption in history; Microsoft’s Azure cloud benefits massively. But it isn’t risk-free: OpenAI is an unpredictable partner, and Microsoft now hangs its most important AI promise on a company it doesn’t control.
I wrote the full story together with Christof Kerkmann for Handelsblatt.