‘Human Capital Does Not Become Less Valuable as Token Capital Grows,’ Says Satya Nadella

Microsoft CEO Satya Nadella said companies must build and retain their own AI capabilities alongside human expertise, arguing that organisational knowledge should not be ceded to a small number of AI models.

In a post on X on Monday, Nadella said the transition to an AI-driven economy differs from previous technology shifts because businesses can now create “a real cognitive loop between people and digital systems.”

“What is at stake is not some digital tool or system and its use, but how organisations continue to learn, build IP, differentiate, and thrive in a world where AI models can continuously absorb the expertise of humans and organisations and commoditise it,” he wrote.

Nadella said every company would need to develop both ‘human capital’ and ‘token capital’. He described human capital as the knowledge, judgement, relationships and ingenuity of employees, while token capital represents the AI capabilities a company builds and owns.

“Human capital does not become less valuable as token capital grows. It only becomes more valuable,” Nadella said, adding that human agency remains essential for setting goals, building relationships and identifying patterns. “Without human direction, you have compute running in circles.”

According to Nadella, the opportunity for businesses lies not in selecting the most capable AI model but in creating systems that allow human and AI capabilities to learn from one another over time.

“This means the real opportunity is not in picking the best model but instead in building a learning loop on top of models where human capital and token capital compound,” he said.

Nadella argued that companies should be able to replace underlying AI models without losing institutional knowledge accumulated through their own systems. He said businesses need architectures that allow agentic systems to improve while maintaining control over intellectual property.

“Companies need to turn their workflows, domain knowledge, and accumulated judgment into AI systems that improve with each use,” he wrote.

The Microsoft chief warned against a future in which a handful of AI models capture most of the economic value created by AI. Such an outcome, he said, could lead to industries losing control of their expertise and knowledge.

“The last thing any of us wants is a world where every company across every sector is ceding value to a few models that eat everything they see,” Nadella said. “If all the value is accrued by only a few models, the political economy will simply not tolerate it.”

Drawing a parallel with globalisation, Nadella said policymakers and businesses should avoid creating an AI economy in which gains are concentrated among a small number of companies while industries see their knowledge commoditised.

He called for the development of a broader AI ecosystem in which organisations own the learning systems built on top of foundation models.

“In my view, our priority has to be building a frontier ecosystem, not just a frontier model, so value flows broadly across every company, every industry, and every country,” Nadella said.