Microsoft CEO Nadella meets with top execs every week to review AI projects

Every week — generally on Thursdays — MIcrosoft CEO Satya Nadella and his top lieutenants convene to discuss the company's growing number of artificial intelligence projects.

Known as AI 365, the meetings started over a year ago and reflect Microsoft's increased emphasis on AI across the product portfolio, Chief Technology Officer Kevin Scott told CNBC in a recent interview. The meetings are in addition to the longstanding gathering of the senior leadership team each Friday.

"When there's friction and obstacles and inefficiencies in the system, people can raise their hands and say, 'I can't do this thing,'" Scott said. Having all the highest-ranking executives in the room at the same time means Microsoft can resolve those issues quickly, he said.

AI is one of the hottest trends in technology, and is a focus at the biggest companies, including Amazon, Google and Facebook. They're all building intelligence into the products they use internally as well as the things they sell and provide to users.

AI systems run behind the scenes in several Microsoft products, including the Bing search engine, which uses it to find images containing similar objects, and the Excel app for Android, which relies on AI to convert data on a page you photograph into a spreadsheet you can populate and edit. AI also powers the Cortana voice assistant and is used to figure out which PCs should receive the latest Windows 10 updates first.

Along with AI's popularity, there's mounting controversy about potential misuse of the technology. After all, engineers are developing algorithms so that machines can do their own training and make decisions independent of human involvement. Microsoft takes the issue seriously enough to warn investors about it in the latest annual report.

"AI algorithms may be flawed," the company said. "Datasets may be insufficient or contain biased information. Inappropriate or controversial data practices by Microsoft or others could impair the acceptance of AI solutions. These deficiencies could undermine the decisions, predictions, or analysis AI applications produce, subjecting us to competitive harm, legal liability, and brand or reputational harm."

There's also the use of AI by the military. In October, an undisclosed number of Microsoft employees wrote an open letter to the company expressing concern about a $10 billion project to develop cloud services for the Department of Defense. In the post, the employees asked about the "violent application" of AI technology and the level of transparency the company would provide to those developing it.

"How will workers, who build and maintain these services in the first place, know whether our work is being used to aid profiling, surveillance, or killing?" the post said.

These are all critical questions for Microsoft after the company added AI to its strategic vision in 2017, officially making it a top priority.

At the weekly AI 365 meetings, Nadella and Scott are joined by Chief Financial Officer Amy Hood and other top executives. Scott said the meetings are important so that business leaders are on the same page and have a clear sense of where projects may be overlapping. They're also useful for allowing a group that's seeing strong results from a particular technique to explain it so that the model can be replicated for other projects.

"You look at something like machine learning where, especially on the frontier, there's a small number of people who really have that frontier-pushing expertise and drive, and you really, really don't want to waste their effort," Scott said.

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