Steven Sinofsky on AI PCs, NVIDIA, and the Future of Computing

0:00Theo Jaffee:Having lived through like a half dozen component shortage things, you just sort of wait them out and you don't let some local max or local min determine the future. This will all correct itself in short order. This world where you're all gated on dollars per token is a thing that's going to move to your own device, which is exactly what happened with all of computing. Anytime there's a resource constraint that you have to pay for, it moves to your device and becomes free. AI introduces yet another opportunity to change that dynamic for the PC, to have it be forward-looking, not backward-looking.

0:40Theo Jaffee:And I think this is an incredibly important opportunity for Microsoft and for the industry as a whole.

0:47Steven Sinofsky:Few people have had a front-row seat to the personal computing revolution, quite like Steven Sinofsky. Over nearly three decades at Microsoft, he helped shape products that defined the PC era, including Windows, Office, and Surface. Along the way, he also witnessed one of the technology industry's longest-running rivalries, Microsoft and Apple. As Apple celebrates its 50th anniversary, questions about product design, platforms, hardware, software, and the future of computing remain as relevant as ever. Theo Jaffe speaks with Stephen Sanofsky about Apple, Microsoft, and the evolution of personal computing.

1:27Steven Sinofsky:I'm in the Situation Room with Stephen Sinofsky, who might have been like the first ever guest on MTS back when we were still doing test streams, I think. He was the first person I interviewed on a test stream. He was the president of the Windows division at Microsoft. He created the Surface program at Microsoft, which we have some very interesting news about today. We're thrilled to have you on. Stephen, welcome to MDS. Welcome back. Well, thanks so much. Good to see you. Hi, everyone. Yeah, hi. First question would be, NVIDIA and Microsoft and ARM and a few other companies just announced something very interesting at ComputeX.

2:12Steven Sinofsky:What exactly did they announce, and what does it matter?

2:16Theo Jaffee:Sure, well, just so folks know, because it doesn't get into as much, but Computex is this big giant trade show in Taiwan. And it's the weirdest show because it's like this turtle inside baseball, you know, Silicon supply chain show. And normally you never hear about it. Like, in fact, I never went to it even. I wanted to, but it actually turns out it was always right around the same time as a big Microsoft sales meeting. So I never went. But you can think of it as the ecosystem show for everything it takes to build a computing device of any kind. Totally well, but Jensen in his keynote last night did this incredible slide where he walked up and down the whole length of the stage pointing to partners that he was very excited to be there.

3:07Theo Jaffee:And I would bet anyone that anyone watching would have no idea who the companies he was pointing at. Like these are some of them, like half of the ones he pointed to as kind of being entertaining were just names of companies in traditional Chinese. And so you didn't even, like, you don't even know what they are. But it's an incredible show. It's just wild because it's such inside baseball about components and peripherals and chipsets and assembly lines and deals and deals and stuff. And every 10 years or so, it jumps into the mainstream. But never, like, the past 24 hours. Just, you never see that.

3:48Theo Jaffee:And actually, it was a lot like, I think it was two years ago, Jensen keynoted CES. And I've been to 40 CESs, and I'd never seen one with such a broad media reach. Jensen's like Taylor Swift of the tech industry. It's so true, yeah. It's an incredible level of, it just speaks to the awareness of tech and then the awareness of AI and what NVIDIA has done. Because, I mean, it was bigger than CES Xbox. It was like a sideshow compared to this. Wow. And he's huge in China, too. Well, the show is always huge in Asia, broadly. Because most of the companies are there, whether they're in mainland or in Taiwan or in Vietnam or Singapore.

4:38Theo Jaffee:And that's sort of the origin of the show. Like, this show is like, go there and speak an Asian language forever. So fascinating. So the big announce, though, I mean, look, there's a zillion things going on. But the one that rose to the top was NVIDIA announcing what they called the RTX Spark Super Chip, which is a mouthful. Before the show, it was broadly called N1X. And, like, that's sort of what it is. is just, it's an ARM CPU mounted with NVIDIA parallel processing graphics basically into one system on a chip that has a whole new memory architecture relative to the historic way that PCs had been built.

5:28Theo Jaffee:And the target for it are the PC makers. And so it's very, very exciting. And if you, the mainstream press, the stock market press, the CNBC going on behind me, like they all looked at this as like NVIDIA entering the PC business, which is what's called the mainstream chip business, which is so weird because, you know, long before in the stone ages, which is now we're talking about 2011, we actually announced NVIDIA making PCs and making the Surface computer, the very first one. And it was a Computex big announcement and it was a CES announcement and it was, you know, I remember that very vividly the partner slide had NVIDIA and Qualcomm and Texas Instruments and all the chip makers and PC makers.

6:22Theo Jaffee:So it has a ring of familiarity at, I would imagine, like 1.100 the scale. All right, I sent you guys, you could throw it up there, I sent you the tech meme from that day when we announced the stuff. And it was still a pretty significant role. So you'll be able to throw it up at some later date.

6:42Steven Sinofsky:Yeah. So in what way is this laptop more like AI native?

6:48Theo Jaffee:So the big thing that's really changed is that the compute burden has shifted from the CPU to the graphics processor and then the associated neural processors, processors, TPUs, and those chips. And that's the thing that really changed. It's not unlike 15 years ago, what had changed was the bulk of the interesting processing had moved from the CPU to the GPU just for rendering. And where we are today is just an extension of all of that. And the difference, it's just insanely important because now that's the compute that we think everybody wants to do. Now, a lot of people will look at this and go, well, I use ChatGPT.

7:33Theo Jaffee:I do it on my MacBook Air, my Chromebook, my phone. I don't really need like another thing. The problem is, and this might be a word you guys have used or heard before, but the problem is tokens. And so the problem is that everybody is gated by the consumption of tokens, which cost money, where you can't get them if you're trying to use them for free. And so the interesting thing about this device is how much of compute can it move to your local device where you basically have infinitely free tokens. And that is incredibly interesting and super important. Now, of course, you've all seen this run up to where we are today with the stacks of Mac minis and everybody running their agents on minis.

8:22Theo Jaffee:And so why did they do that? Well, there's a whole bunch of stuff about privacy and sandboxing them. But the primary thing was if you just want to let something roll for three days while it figures out your best travel itinerary, you really don't want to end up with a$10 ,000 bill. So instead you buy, you know, three minis and let it crank away with like each mini putting something in isolation or whatever. And so, but if you just fast forward, six or nine months, it's abundantly clear. And I say that as a predictor of the future, not like it's obviously intellectually clear. But it just seems to me that this world where you're all gated on dollars per token is a thing that's going to move to your own device, which is exactly what happened with all of computing.

9:09Theo Jaffee:Anytime there's a resource constraint that you have to pay for, it moves to your device and becomes free. and that, it just, I just don't imagine, I don't know how it can happen. Sure.

9:24Steven Sinofsky:So for someone who wants a more AI-native device in like a year when all of these products have shipped, do you think they're going to want like an NVIDIA Spark laptop, or do you think they're going to want to stick with like MacBook Pro, or the rumored MacBook Ultra, which is supposed to come out later this year, early next year?

9:42Theo Jaffee:Well, this is just, I mean, this is the huge thing. And the way that I think this can play out is, well, of course, you can play it out in essentially status quo, which is the Fortune 500 80-20, 70-30 rule will just fall to Windows devices running Intel or maybe Spark devices running ARM but running with a Windows operating system. And then, you know, the cool people, the bosses, the elites, or whatever you call it, running their MacBook Pros with Chrome or Safari just connecting things, and phones. But there's another path where it becomes incredibly important to run highly optimized AI stack of software on your device.

10:32Theo Jaffee:And whatever that stack is, is going to get optimized for a particular hardware base. And that's a thing we've seen over and over again. Now, where we are right now is just so interesting because we don't have enough information to know where things are heading. At the announcement last night and the press releases and the commentary, you know, Microsoft made it clear, much to my surprise, which we could go into, that the NVIDIA stack of CUDA will be available and supported and part of this Spark. Now, there are a lot of ways for that to become true. It could be a download that just runs. It could be a thing that's installed, pre-installed on a Spark device.

11:13Theo Jaffee:It could be a thing that's part of the OS and updated with Windows Update and administrative permissions and all of this other stuff. It could be a whole range of things. And I still don't, nobody knows yet in terms of public announcing how they're going to do that. But the same thing holds for Apple. And today on a Mac, you can run all the models locally and stuff like that. You can't really do that on a phone. And so an interesting question is going to be, what is Apple going to do at WWDC with respect to the CUDA APIs? Are they going to be native? Are they going to be a thunking layer? Lots of stuff could happen there.

11:58Theo Jaffee:Are they distributed? Is it an App Store app? Is it an OS component? Nobody has any idea. Now, for both companies, the past is very interesting. And most people didn't live through this, but NVIDIA has always been an outsider to the personal computer industry. It's always been an add-on. So on the PC, if you ever wanted to use an NVIDIA graphics card, you bought the card and you downloaded drivers from NVIDIA. Or before that, they came on a CD or a floppy disk that came with your graphics card. And so for 30 years, this whole thing was like, do you have the Lotus NVIDIA drivers? Where do you get them?

12:37Theo Jaffee:And we went from getting a new CD to getting a new DVD to FTP to downloading them from the web. It was a whole cycle. But it was never a first-class part of Windows until we fixed that in Windows 7 and got them on Windows Update and all this other stuff. And the APIs on a PC to do graphics, you could always just download the NVIDIA library and call them. But the official Windows APIs were DirectX. And they just did the same kind of thing, just completely differently. That the X is Xbox. And so Microsoft was all in on the DirectX APIs. They were a huge part of Windows release called Windows Vista when they first got integrated and then Windows 7 forward.

13:24Theo Jaffee:Then there were the NVIDIA APIs, which at first were just the NVIDIA APIs, then they became CUDA. Then for graphics, NVIDIA embraced this open thing called OpenGL. And then Apple went through the same exact thing. On the Mac, you could download drivers, you could install an NVIDIA card. But the APIs, and then they supported OpenGL for a while, but they always wanted you to use their own stuff. And the phone did a really good job with all of that. and Maribold did away with all that and it was all in on Apple. Now, the good news for Apple was the native graphics were just outstanding and they've always been great.

14:05Theo Jaffee:On the PC side, Intel was so far behind that it just kept pulling both NVIDIA and ATI slash AMD to be what you used if you used Photoshop or made movies or were just graphic intensive. And so in the next few weeks, will know what Apple is going to do for these APIs, and more importantly, the modders themselves and the runtime. I mean, NVIDIA has an enormous investment in the open-source models and tuning them through their hardware. And the ecosystem has done a great job, as evidenced by the Mac minis, of tuning those APIs for the Mac, but that has nothing to do with the phones. And so that's an operating system difference.

14:52Theo Jaffee:And the number of phone people is large. And as we know, the hardware is the same. Now, it's not quite the same and blah, blah, blah, amount of memory, all that stuff. But it's very interesting to see the details of Microsoft and then what Apple chooses to do. Right.

15:12Steven Sinofsky:So, like, obviously we are seeing like a memory shortage, right? And like, so what do you expect the cost to a consumer of this kind of very AI-native computing device to cost?

15:27Theo Jaffee:Well, certainly, having lived through a half dozen component shortage things, you just sort of wait them out, and you don't let some local Macs or local min determine the future. This will all correct itself in short order. The history of it, whether it's been DRAM or hard drives or processor shortage, all of these things. We've had them come and go, or even smaller components. So I'm not worried about it at all. I mean, obviously, you know, if you're thinking that you need, you know, 96 or 128 gig for a standard consumer device versus, say, the 8 on a MacBook Neo, there's a huge difference. But also that will change in the models too.

16:11Theo Jaffee:Like right now, the models themselves are all tuned to run in hyperscale data centers. And every month, it seems like there's a new paper that says, oh, we cleaved this giant thing off of the inference pipeline. So now we don't need nearly as much memory. So that all will get fixed. Not even an inkling of concern I have for that problem.

16:35Steven Sinofsky:So another thing that was just announced yesterday was, last time we talked, you were very, very excited about the MacBook Neo for Apple as like a category-defining product. Dell just came out with the new XPS 13 that is, they say, slightly better specs than the MacBook Neo, and it's like$100 more expensive. So the Neo is like, what is it? It's$400 for students,$500 for everyone else?

17:05Theo Jaffee:It's$599,$699. $599,$699. Yeah.

17:09Steven Sinofsky:Yeah, this one. $499,$599, I think. Yeah, the XPS 13 is$599,$699. Yeah, yeah. MacBook Neo is$49,$599. Yeah. So what are your takes on this?

17:24Theo Jaffee:Well, first, you know, kudos to Dell. Like, Dell is just on an incredible roll. And Michael Dell is just a legendary CEO. And read his book, his second book that came out during the pandemic, I think, or right after, right before. It's fantastic. But the XPS 13, for a very long time, was sort of my go-to laptop when friends and family and whatever would ask for one. It is like the best laptop. And then it took a little bit of a dip and went in a funky way on design. And it is actually back with a vengeance now. And so XPS 13 is the laptop to get. Now, this latest one is an attempt to build on that same chassis using Intel, you know, 30 years, I can't keep track of the names, or three.

18:18Theo Jaffee:Panther Lake, Python Lake, something, Crystal Lake, I don't know what it is, it's some lake. Intel names are always places I've never been. And Panther Lake. Panther Lake. It's the Intel Rails, there's a lot of excitement about it, it does integrate some of the AI compute stuff into it, but it's not going to be the target machine that the PC ecosystem wants to sell, and its capabilities are going to be different from the ones that they do want to sell, which is different than the Neo, which has the capabilities that need to be targeted. So the Apple hardware line has a lot of homogeneity in it in terms of capability.

19:04Theo Jaffee:But PCs can become really hit or miss, and that's always been the difficulty in the PC ecosystem is even when there's a winning machine, it's not the one that when you walk into Best Buy and say, I need to buy a computer, help me, Mr. or Mrs. Salesman, and then they just direct you to something based on Spiff and current ads or whatever. So we'll see. I'm sure it's a quality machine. You have the tech people on X talking about taking sides. It's either the NeoKiller, because it has an HDMI port or whatever, or it's embarrassing to the PC ecosystem because regardless, it still runs Windows. Those extremes are stupid.

19:48Theo Jaffee:Both the Neo and this machine are targeted at just people who need a computer. I think in five years, people who need a computer will also need a computer that runs agents. But the hardware software world will be unimaginably different in five years. So this conversation has no relevance to the product lines that will be available in five years. So, wow, it goes up to 32 gigs of RAM in a terabyte of storage.

20:22Steven Sinofsky:It starts at 8 gigs of RAM, which is like not great, I guess. 512 gigs of SSD.

20:28Theo Jaffee:That's not a good number for a PC. The Mac would do 8. The PC is, you know, like I hate saying it and I've truly had a bunch of these over the past month. six months or so, but I spent a lot of energy with our team on getting the memory down to two and four gigs at the time. But eight is going to be hard. Now, Windows is doing a lot of work right now on that, so we'll see where that goes. But right now, if you ask me about what PC to buy, I would send you to a 16-gig PC. it takes work it takes like techie work to get it down to be 8 gig reasonable like uninstalling a bunch of stuff playing around stuff that you shouldn't tell anyone to do

21:16Steven Sinofsky:like which PC would you recommend like a specific laptop Dell XPS 13

21:21Theo Jaffee:I would get I would get Dell XPS 13

21:25Steven Sinofsky:what do you think about the Surface lineup right now