Microsoft CEO Satya Nadella warned enterprises using AI about the \u201creverse information paradox\u201d which could lead to the company having to pay twice \u2014 once in cash, once in proprietary knowledge \u2014 in a lengthy social post on Sunday.<\/p>\n
\u201cIn the AI age, the buyer risks giving away knowledge, just to use what they bought. You essentially pay for intelligence twice, once with money, and again with something even more valuable: the proprietary knowledge you must reveal to make that intelligence useful. The better you want the model to perform, the more of that knowledge you have to feed it! Over time, the information asymmetry becomes increasingly skewed. The seller learns more and more about you as you use what you purchased, while you learn very little about what the seller is learning in return,\u201d Nadella wrote on X. The post received nearly 10 million views at the time of this article.<\/p>\n
READ: Microsoft CEO Satya Nadella warns of few AI giants \u2018destroying entire industries\u2019<\/a> (June 15, 2026)<\/p>\n AI models typically learn from user inputs to improve their performance. However, the knowledge they gain is generally retained by the AI company, which can use it to train and improve future models.<\/p>\n \u201cIn consuming intelligence, you are creating intelligence. And what you create should belong to you. This is your particular intelligence, in Hayek\u2019s sense: the knowledge of time, place, and circumstance that no one else can hold. It knows what you value, and how you measure success. While the great innovation that comes from model providers having fair use rights to train models on public data is needed, I find it ironic that the status quo is to then turn around and impose restrictive terms of on distillation, and to reserve the right to learn from customer usage and interaction data,\u201d Nadella added.<\/p>\n Nadella also highlighted<\/a> a few ways through which companies can preserve their competitive edge despite this. Nadella said companies should build their own private systems to evaluate AI, allowing them to decide what good performance looks like based on their own business needs. He also urged organizations to keep control of their internal knowledge\u2014including data, feedback, decisions, and institutional expertise\u2014as well as the outputs generated from their own AI tasks and queries.<\/p>\n READ: Satya Nadella says Microsoft was ready to spend $25 billion after Sam Altman firing<\/a>\u00a0(May 15, 2026)<\/p>\n He further recommended creating secure, in-house environments where AI models can be trained or fine-tuned using a company\u2019s real workflows without exposing sensitive information to external AI providers. Finally, Nadella said businesses should avoid relying on a single AI model by keeping the software layer that manages AI tools independent of any one provider.<\/p>\n