What are your preliminary thoughts about the data protection bill?
I would affirm what I said a year ago. It was more important to get it right than to go fast. And the government has gotten it right. It’s applying strong protection for personal digital data. It’s focused on the kinds of consent requirements while at the same time it allows data to cross borders, which is important because India serves the world in terms of data. ‘India Better Poised Today Than Before’
It was smart to focus on personal data and not all kinds of data. Everyone will now focus on what comes next, which is the implementing regulations and with all such laws, there are a lot of details to come. It’s a very sound and strong framework and consistent with international standards.
What are your broader views on this entire overhaul that India is undertaking when it comes to regulations that impact technology companies?
I would start with where India stands in the world when it comes to technology, especially AI, because that’s been the most significant change in the last 12 months. In many ways, India is even better poised today than before. This whole focus on digital public goods and digital public infrastructure is gaining momentum around the world. The refinement of the concepts in the past year reflects that the conversations that have been taking place with other governments are yielding early interest that has real potential. So India has more opportunities to take its technology around the world.
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Secondly, the skill base here is continuing to grow at an aggressive rate. There is a greater recognition around the world of the demographic changes and the challenges that the rest of the world is facing. India has an abundance of the most important natural resource in the world -people. People who are younger and are entering the working age population, people who are learning engineering and other skills, that works well.
We have seen a spate of layoffs by large technology companies. What are your thoughts on whether the world is going into a recession and what does it mean for Microsoft?
In hindsight, the pandemic was a bit of a bubble for the tech sector. At the time, everybody thought it was accelerating growth that would continue at this accelerated rate. So we went up and then we went down and now we’re levelling off. For a company like Microsoft, say between 2015 and 2020, each year, on average, our revenue grew 14-15%. It went up to 20%. It came down to single digits. Now, it’s coming back. I would hope that we’ll get back to something like the growth rates we had between 2015 and 2020, with perhaps some AI upside. We’ll see but that’s the opportunity we have to pursue as a company and even as an industry.
But AI is more capital intensive, the amount of money that’s being spent on infrastructure, GPUs, CPUs, energy, fibre, buildings, everything (is huge). Which means that capital costs will probably grow much faster than the costs related to people. But I’ll always argue the people matter hugely. We need great people. We had this most difficult period in our rear-view mirror now. We still grew the number of employees to 16,000 in the India engineering teams. But we’re going to see the people’s side grow more slowly than the capital side. And we’re going to really have to focus on how we upskill our people. That to me will be a hugely important priority.
India so far has not taken a stand on AI regulation. What would be your recommendations?
There is an opportunity to start to think about how some of the global examples can be transposed into something like the Digital India Act. But there’s a broader opportunity that will take centre stage in the latter half of this year. One of the more interesting moments in the year was when the European Union and the United States said they wanted to pursue a voluntary code of conduct that would be adopted by the G7 countries plus India and Indonesia. And that is an unusual and perhaps even unique opportunity globally and for India.
Because a voluntary code can move more quickly than legislation at the national or global level. It puts India in a position to exercise influence, especially coming out of the G20 presidency. And that by fashioning some common ground at such an international level, it can lay the blueprint for what India can choose to implement nationally as well.
