Nadella urges firms to build ‘token capital’ and human capital

Microsoft Chief Executive Satya Nadella urged companies to build what he calls “token capital”—their own AI systems and models-and to strengthen human capital so firms can compound learning and protect institutional knowledge. He made the remarks in a recent post.

Nadella defined token capital as a company’s proprietary AI capability: the systems and models it builds and owns. He described human capital as employee knowledge, relationships and pattern recognition. He wrote that human direction is what creates value from compute, adding, “Without human direction, you have compute running in circles.”

He outlined a model in which businesses place a learning loop on top of base AI models so that human expertise and machine systems grow together. He noted companies can automate tasks or jobs, but cannot transfer the learning those tasks produce. “You can offload a task, or even a job, but you can never offload your learning. The future of the firm is the ability to compound that learning across people and AI,” he wrote.

Nadella called for a new architecture in which organizations build agentic systems that improve over time while retaining control of their intellectual property. He argued for an ecosystem approach instead of reliance on a single leading model, saying each company should own the loop that captures its institutional knowledge. He wrote that loop should allow a firm to swap a base model without losing accumulated expertise and described private evaluations and reinforcement learning environments built on a company’s own data. “This is the key ‘test’ of your control and sovereignty in the era ahead,” he added.

He warned against concentration of value in a few dominant models, comparing that risk to past economic shifts that hollowed out industries. He wrote, “The last thing any of us want is a world where every company across every sector is ceding value to a few models that eat everything they see,” and added that if most value accrues to a handful of models, political and social responses could follow.

Nadella’s remarks come as enterprise spending on AI is running ahead of corporate forecasts, a trend that raises questions about whether that investment will create owned capability or increase dependence on external providers.