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Steven Sinofsky on AI PCs, NVIDIA, and the Future of Computing
00:29:00
Theo Jaffee speaks with Steven Sinofsky about the next generation of personal computing and the growing role of AI-native hardware. The conversation covers NVIDIA’s entry into the PC market, Microsoft’s strategy for AI-powered devices, Apple’s hardware roadmap, and the long-running tension between backward compatibility and platform reinvention. Sinofsky explains why AI may fundamentally change how personal computers are designed, and why local inference could become increasingly important as AI workloads grow. Along the way, they discuss Windows, Surface, Arm processors, Apple Silicon, and what the future of computing might look like as AI shifts from the cloud to devices.
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- [00:01]
Steven Sinofsky
Having lived through like a half dozen component shortage things, you just sort of wait them out and you let some local Macs 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. And I think this is incredibly important opportunity for Microsoft and for the industry as a whole.
- [00:48]
Podcast Host (A16Z Narrator)
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 Steven Sinofsky about Apple, Microsoft and the evolution of personal computing.
- [01:27]
Theo Jaffe
I'm in the Situation Room with Steven 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. Steven, welcome to mds. Welcome back.
- [01:56]
Steven Sinofsky
Well, thanks so much. Good to see you.
- [01:58]
Theo Jaffe
So, 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. What exactly did they announce and what does it matter?
- [02:16]
Steven Sinofsky
Sure. Well, just so folks know, because it hasn't, it doesn't go get in the news much, but Computex is this big giant trade show in Taiwan and it's, it's the weirdest show because it's like this total inside baseball, you know, Sirican supply chain show. And normally you never hear about it. Like in fact, I never went to it even I wanted to. Well, it actually turns out it was always right around the same time as a big Microsoft sales meeting. So I never went. But you could think of it as the, the ecosystem show for everything it takes to, 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. 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. Were just names of companies in traditional Chinese. And. And so you didn't even, like, you don't even know what they are. But it's, 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, and it's 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. And actually, it was a lot like, I think it was two years ago, Jensen keynoted CES and I, I've been to 40 cess and I'd never seen one with such a broad media reach.
- [04:02]
Theo Jaffe
Yeah, Taylor Swift of the tech industry.
- [04:06]
Steven Sinofsky
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, like, I, you know, it was bigger than, like, ces. Xbox was like a sideshow compared to this.
- [04:24]
Theo Jaffe
Wow. Yeah. And he's huge in China too.
- [04:27]
Steven Sinofsky
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. 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. 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 the. The what it is is just, it's a ARM CPU mated 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 have been built. And the target for it are the PC makers. 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, let's call it the mainstream chip business, but which is so weird because, you know, long before in the Stone Ages, which is now we're talking about 2011, we actually announced Invulu and milking PCs and making a Surface computer. The very first one. And it was of Computex. Big announcement. And it was a CES announcement. And it was, you know, I, I remember that very vividly. The partner slide had Nvidia and Qualcomm and Texas Instruments and, and all the chip makers and PC makers. So it has a ring of familiarity at, I would imagine, like 1/100th the scale. Oh, I sent you guys, you could put it. But I sent you the. The tech meme role 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. Yeah. So in what way is this laptop more like AI native? 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, 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, that we think everybody wants to do. Now, a lot of people will look at this and go, Well, I use ChatGPT. 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, 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. Well, 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. Yeah. And everybody running their agents on minis. 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, you know, six or nine months, it's abundantly clear. And I say that as a predictor of the future, not like as a, it's obviously intellectually clear, but like, 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. Yeah, 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. And that it just, I just don't imagine it, I don't know how it can't happen. Sure.
- [09:25]
Theo Jaffe
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?
- [09:42]
Steven Sinofsky
Well, this is just, I mean this is the huge thing and the way that, that I think this can play out is. Well, of course you can play it out in like essentially status quo, which is, you know, the Fortune 500, you know, 80, 20, 70, 30 rule will be it 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. 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 can 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. 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, nobody knows yet in terms of public announcing how they're going to do that, the same thing holds for Apple and, and you know today on a Mac you can run all the models locally and stuff like that. You can't really do that for on a phone. And so interesting question is going to be what is Apple going to do when at WWDC with respect to the CUDA APIs, like are they going to be native? Are they going to be a thunking layer? Lots of stuff could happen there. Are they distributed? Is it an app store app, Is it an OS component? No, 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 they came 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 latest Nvidia drivers? Where do you get them? And we went from you know, getting a new CD to getting a new DVD to FTP to downloading them from the web, it was 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 mat 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, it was 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. Then there were the Nvidia APIs which at first were just where we're 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 away with all of that and Marable 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 on The PC side, Intel was so far behind that it just kept pulling both Nvidia and ATI AMD to be, you know, what you used, if you used Photoshop or made movies or were just graphics graphic intensive. And so in the next few weeks we'll know what Apple is going to do for these APIs and more importantly the models 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 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, to do.
- [15:10]
Theo Jaffe
Right?
- [15:11]
Steven 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 like you know, very AI native computing device to cost? Well certainly for the having lived through like a half dozen component shortage things, you just sort of wait them out and, and you don't let some local Macs or local min determine the future. It, it, 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. 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.
- [16:36]
Theo Jaffe
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 on slightly better specs than the MacBook Neo and it's like a hundred Dollars more expensive. So the NEO is like what is it? It's 400 for students, 500 for everyone else.
- [17:06]
Steven Sinofsky
599, 699.
- [17:08]
Theo Jaffe
699, yeah, yeah, yeah.
- [17:10]
Steven Sinofsky
And then 499, $5.99 I think. Yeah.
- [17:13]
Theo Jaffe
The XPS 19 is 599, 699. MacBook Neo is 499. 599, yeah. So what are your takes on this?
- [17:25]
Steven Sinofsky
Well, first, you know, kudos to Dell. Like Dell is just on an incredible role and Michael Dell is just legendary CEO and read his book, his second book that came out during the pandemic, I think 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. I, I, you know, 30 years, I can't keep track of the names or three. Panther Lake, Python Lake, something. Crystal Lake. I don't know what it is. It's some lake that's Intel. Names are always places I've never been. Panther Lake, it's, 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, the PC ecosystem wants to sell. And it's 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, 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. 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, you know, taking sides. It's either the NEO killer because it has an HDMI port or whatever, or it's like embarrassing to the PC ecosystem because regardless it still runs Windows. Those extremes are Stupid. You know these, 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 5 years.
- [20:16]
Theo Jaffe
So wow. Goes up to 32 gigs of RAM and a terabyte of storage. It starts at 8 gigs of RAM, which is like not great I guess.
- [20:27]
Steven Sinofsky
512 gigs, that's not a good, that's not a good number for a PC. Yeah, the Mac would do eight. The PC is. I, you know, like I hate saying it because, and I truly had a bunch of these over the past month, six months or so, but I, I spent a lot of energy with our team on getting the memory down to, to two and four gigs at the time. But eight is, is, 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, if you, 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 wouldn't, you shouldn't tell anyone to do.
- [21:16]
Theo Jaffe
Like which PC would you recommend? Like a specific laptop? Dell XPS?
- [21:21]
Steven Sinofsky
Yeah, any I would get, I would get Dell XPS 13.
- [21:27]
Theo Jaffe
What do you think about the Surface lineup right now?
- [21:31]
Steven Sinofsky
Well, yeah, okay, look, I'm obviously not objective about the Surface lineup. I think that the PC Eco. But when we designed Surface and I wrote like 80 million words on this, which everybody could go see on hardcore software. I'm not going to replay them here about what we did wrong and right. But originally Surface was envisioned to be those platform discontinuity in PCs. It was going to be the move to mobile chips, ARM and mobile form factors like a tablet. We shipped it as a convertible tablet, but as a tablet we actually did an intel x86 based surface. And at the time we called it an objection handler and it was to handle the objection of things you didn't like about the ARM based Surface. You know, like, like that it was, it didn't run existing software, it wasn't compatible with old software or whatever. And, and so my heart and the strategy for ARM was always to introduce this discontinuity where look, the world is different now, the hardware world is different now, the usage Scenarios are different now and portability is different. People want better battery life, they don't want fans, they don't want viruses, and all that other stuff didn't work. I moved down to San Francisco area to talk to founders and stuff and what Microsoft did was sort of basically abandon ARM for the next eight years or so and focus on the objection handler side of things. So all the surfaces that followed were in my mind a niche product because they were just like different Intel PCs that weren't super important to me. I mean, I had brought each one of them, but they weren't important to me. AI introduces yet another opportunity to change that dynamic for the PC to have it be forward looking, not backward looking. And I think this is incredibly important opportunity for Microsoft and for the industry as a whole. But the Wire, it's different like it was in 2011 in that it's mobile chips and the scenarios are different even more so. 80% of the typical PC buyers are just running browser based compute and they just want the, they just want the keyboard, the form factor, and they like Macs because they don't wear down over time. They, they have all their battery life for real. They have the viruses and malware, a whole different game. It's sort of this sealed case that we used to call it. PCs that did move to ARM also ported all of the Windows APIs, which was the thing we chose not to do. So now the new PCs running arm are just the old PCs with the same viruses, the same problems with fans, the same, you know, lack of quality over time. Like, you know, the classic Windows thing is, oh, you could just go edit the registry. Well, if you have an ARM PC, you could still go edit the registry and you could still hork your PC totally. And then you're, you're screwed. And so I don't, I just don't think that backward looking is the thing. Which brings us to last night and all the X comments on the, the, the Spark laptops and everybody immediately jumping to two things. First, Nvidia announced that they're all going to run all existing Windows programs, which of course just follows from Microsoft's strategy of porting win 32 to ARM, which wasn't hard. We'd already done it. It was just opening up the dev tools and the ability to load the apps and things which we disabled for ARM because we wanted to move the ecosystem forward to a new OS API. But then the other part of this is just how you spin the whole thing in terms of backward compatibility. And then they said, oh, it runs every single app of all time. It's like, yeah, but you don't want to do that. And more importantly, the second thing is you don't need it anymore. But all of the enthusiasts are going nuts because they see it as intel or intel being replaced by Nvidia, which is conceptually true, except not really. It's just an alternative. And what you're going to see in the marketplace is just sort of this price comparison. And intel and Nvidia are just going to drive the prices to each other, and only one of them can really afford the battle. But that doesn't change the value proposition for consumers, which is what they really want is to not have that backward compatibility. They just don't know it. If they, they got a PC without a fan, that you couldn't edit the Registry, you couldn't break it, you couldn't just go into the system folder and delete stuff. All of these things that you don't even think about on a Mac anymore, and you don't even think about. You can't even think about on a phone. You. You don't want them on the PC. And so it's tough for me to see Microsoft sort of embracing this, because I, I mean, I understand, like, if you want to sell the enterprise, you have to run that VB app from 2003, but that's not you. You don't need to do that. You could just put it on a server and remote. Remote into it. You could put it in a VM on a X86 machine. There's a million ways to do that. You just don't need to run it on the machine that you want to run your agents on. And in the short term, everybody is going to be running terminal anyway. And these agents in today's agents are all headless anyway. That will change, too. But right now, you. That's the big. We make this fork in the road. And Microsoft has already said the direction that they want to take it, which is they just want Nvidia chips to do all the things that Windows has always done, which always tests well with customers until you say the customer's like, yeah, but those Registry editors and admin scripts and stuff really screwed us up. And like, we know, we know this, so it's tough for me to see.
- [27:54]
Theo Jaffe
Yep. Well, we're really excited for the Nvidia Spark laptops to come out later this year. We'll see if it can replace my MacBook. Yeah, I'm not, I'm not sure we'll see. Yeah, we'll do. We'll do a tech review on stream.
- [28:06]
Steven Sinofsky
Well, I have the. I mean, you could see what it's going to be like if you just have the, the spark that you could get from Dell today. That's the mini device. I have one of those. And it's incredible. I mean, it's just. And there's a tower as well.
- [28:22]
Theo Jaffe
All right, well, we'll take a look at that. Steven, thank you so much for joining us.
- [28:26]
Steven Sinofsky
Sure. Thank you guys.
- [28:30]
Podcast Host (A16Z Narrator)
Thanks for listening to this episode of the A16Z podcast. If you like this episode, be sure to like, comment, subscribe, leave us a rating, or review and share it with your friends and family. For more episodes, go to YouTube, Apple Podcasts and Spotify. Follow us on X16Z and subscribe to our substack@A16Z substack.com thanks again for listening and I'll see you in the next episode. This information is for educational purposes only and is not a recommendation to buy, hold, or sell any investment or financial product. This podcast has been produced by a third party and may include paid promotional advertisements, other company references, and individuals unaffiliated with A16Z. Such advertisements, companies and individuals are not endorsed by AH Capital Management, LLC, A16Z or any of its affiliates. Information is from sources deemed reliable on the date of publication, but A16Z does not guarantee its accuracy.
- [29:28]
Steven Sinofsky
Sam.