Microsoft CEO: "AI Agents will Replace All Software"

We have entered the "agentic era"; the era of the agent or intelligent software agent. Others refer to this as the "algorithmic economy".  Maybe think many very intelligent microservices exchanging information with each other and can work globally.

In an interview with BG2, Microsoft CEO Satya Nadella predicts that (paraphrasing) SaaS (software as a service) is dead and that AI agents will replace all software. The entire interview is the first link in "Additional Information" below.  These three videos provide a focused look at this statement:

Here is my personal interpretation of what Satya Nadella is saying and what it means.  First, Nadella says that we are "on the brink of a monumental shift".  I agree with that statement and have pointed out that we are going through a great transmutation for the past five years.  I have also pointed out that a transition to modern accountancy is inevitable.

Note that "AI" or artificial intelligence does not mean just generative AI.  It also does not mean just rule-based AI.  It is very important to have clear terminology to effectively communicate about all this stuff.  Buzz words will not get you to the level of understanding that you need if you truly want to understand what is going on.  The way that I see it is that:
  • (a) there are three fundamental types of artificial intelligence including rule-based artificial intelligence which works using deductive reasoning, probability-based artificial intelligence which works using inductive reasoning, and clever hybrid combinations of rule and probability based which can give you abductive reasoning; it is important to use the right tool for the job;
  • (b) AI is software so it cannot "replace all software" rather the software stack will be rethought and reorganized; 
  • (c) relational databases will be supplemented with graph databases; 
  • (d) private and public digital distributed ledgers will play a role in the future software paradigms;
  • (e) there are many different software stacks that can be used to implement this new paradigm;
  • (f) structured information, unstructured information, and semi-structured information will all play a role but the most reliable and flexible information format is semantically oriented structured information;
  • (g) business logic (a.k.a. business rules) which tends to be represented within code today will be separated from the code and represented as declarative business rules which can be managed by business professionals instead of IT;
  • (h) having a "global" perspective as opposed to a "local" or siloed perspective is critically important.
There are a lot of additional moving pieces to this puzzle.  One moving piece is standards.  Agreement on certain things matters a lot. Another moving puzzle piece is quality and using tools like Lean Six Sigma to manage that. Informatics and cybernetics will play a role in the design aspects of this new paradigm.

Additional Information:

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