Microsoft’s Vision for an Internet Made for Agents With CTO Kevin Scott (Best of the Pod)

You're someone who I think cares a lot about the craft of things. One of the knocks on, you know, using agents for coding is it gets rid of some of that feeling or something like that. How do you feel about that? I love the fact that my people, makers writ large, so software engineers or mechanical engineers or woodworkers or potters, if you are really passionate about what you do, you're going to have very strong opinions about how you do it. I've been a woodworker for almost as long as I've been a programmer. This is not the first moment in the past four decades where the nature of software development has changed in a non-trivial way. Like, if agents are going to be useful, they have to take action on your behalf. They have to be able to use tools and make changes in systems and consult information sources that are, you know, diverse and rich. And in order for that to, like, really be great, you need an ecosystem that looks a lot like the internet. If you have a source of information, you already have a website, you already have an API that's doing something for people out there. Like, you've got to figure out how to plumb things through where agents can, like, talk to those things. Like, one of the things as CTO that I've been pushing for at Microsoft is, like, I want all of our systems internally to speak a standard protocol to all of the agents that we're writing inside of Microsoft. Be curious, try stuff, and if it works for you, use it, and if it doesn't, don't. Kevin, welcome to the show. Thanks for having me. One of the things that's interesting is I was here last year. Yep. And you said two things. There are two big themes. One was agents are going to be everywhere. That's one of the things you said, which I think really came true. That was very prescient. Another thing is I noticed a big emphasis last year on scaling laws. Yep. There were a lot of graphs of, like, we're building big infrastructure, we're building these bigger models, and every two years we're going to get these big performance improvements. Yeah. This year the emphasis is really on the agentic web. Yep. So what has changed? What have we learned from last year to this year? Yeah, I think there's a bunch of things that have changed. Like, one of the things is that I think last year... People were, like, really in this state of mind that they were doubting that the scaling laws were going to continue to work really well. Whereas, like, I think, you know, we've demonstrated year after year after year that they are intact and working quite well, that, like, that's not a thing that people need to be reminded of anymore. And I think the other thing, too, that's happened, honestly, is that the reasoning capabilities of the models has actually gotten a little bit ahead of what we're using the models to do in products. So I've been talking a lot lately about this thing called the capability overhang. And, you know, I think we actually have some work to do collectively across the whole industry to close the gap between what the models are actually capable of and, like, what we're delivering to users of that capability. So that's one of the, like, big thematic things why, you know, scaling laws might not be as interesting to talk about at this year's Build as last. And then the other thing, too, is that we've just discovered is all of these agents have emerged over the past year. And so, like, both the number of agents and, like, the amount of time that people are spending doing stuff inside of these agents or with these agents is that there's a bunch of other stuff other than reasoning that has to get sorted out in order to make them as useful as they should be. So, you know, the things that I was talking about at the keynote today at Build were, you know, we need better agentic memory, like our agents right now, because memory is constrained in a bunch of interesting ways. They're a little bit transactional, so, like, you use them for, like, one thing and, like, you know, memory is coherent across the course of that task. But, you know, then it may or may not completely go away and, like, you're starting from scratch the next time, which really inhibits your ability to delegate increasingly complicated tasks to these things. And then, like, there's just— This real issue that, like, if agents are going to be useful, they have to take action on your behalf. Like, they have to be able to use tools and, like, make changes in systems and consult information sources that are, you know, diverse and rich. And in order for that to, like, really be great, you need, like, an ecosystem that looks a lot like the internet, where if you have a source of information, you already have a website, you already have an API that's doing something for people out there. Like, you've got to figure out how to plumb things through where agents can, like, talk to those things and where, you know, all of the incentives are aligned for everyone to, like, go have all of this stuff participating in, you know, ways that make sense to them in this agentic web. And so I think that is the big story this year. It's like you've seen the first glimmers of, like, real progress with, like, super awesome simple open protocols like MCP that are serving the same purpose in this agentic web as HTTP does on the internet, and where you have things like NL Web that are, like, serving, you know, the same moral equivalent purpose as HTML does on the internet. And so I think you're going to see these things, like simple things that are composable and layering and, like, just lots of activity in the open community and, like, a bunch of things hopefully getting to ubiquity so that agents can actually do stuff. Right. So I think to play that back, like one of the things I hear is, like, we have agents. Agents are starting to work. And in order to make them powerful, agents need access. They need access to, like, whatever is out on the internet, whatever is on your computer, all that kind of stuff. Yep. And you need basically protocols and processes for agents to be able to access that stuff. And so you're looking at different parts of the stack. So, like— Absolutely. —the runtime layer where you're, you know, you're building, like, memory and all this kind of stuff, and then MCP, which allows you to connect into the wider internet to get more information into agents. Yep. I guess, why is that important to Microsoft, and, like, what role do you want to play in that kind of an ecosystem? Well, look, I think there are, you know, two, maybe three things that are super important. So one is, like, we make agents, and in order for our agents that we're building for folks to be useful, like, we need to solve these problems inside of these agents. And, like, even if you sort of scope it down narrowly to enterprise agents, like one of the things as CTO that I've been pushing for at Microsoft is, like, I want all of our systems internally to speak a standard protocol to all of the agents that we're writing inside of Microsoft so that we're not exposing the entire world to, like, Conway's Law, which is, you know, organization— so Conway's Law is a really funky thing in compilers where, you know, this guy Conway said that the number of stages or passes in your compiler is going to be dictated by the number of teams you have working on the compiler. You ship your org chart. Correct. You ship your org chart. And so, you know, you certainly inside of the confines of a company like Microsoft, like, you don't want to be shipping your org chart when you are building your agents. And, like, it's just kind of a horror show to watch, like, as an engineer, like all of this inefficient building, like when you don't have, like, those standard protocols and services that everybody's using. But I think, you know, if you sort of imagine— if you really imagine, like, what agents could do and, like, what you, you know, what users, like not me, but, like, you know, just people who are hoping these things can be more useful than they are right now, like, you need things to start happening the same way that they were happening with the web. And, like, I kind of see it right now. Like, MCP is, like, a really great example. So it is a really simple protocol that solves a really important problem, not just for people who are making agents and building platform infrastructure, but for, you know— Users of these systems who want them to be more useful, and for people who are providers who are like, hey, like I want to be participating in this new agentic web, is like people are doing less of one thing which I knew how to connect to, like, and they're sort of sitting here using these agents. Like, how do I get my stuff wired up into this, and like, how does it make sense for me, like even from a business model perspective, to do that? And so, like, that's the two things. It's like make our own agents more useful, and then, like, we're a platform company. Like, even more important than the agents that we're going to write ourselves, like that platform layer that Microsoft has been building in technology for 50 years, like we just want to make sure that we are helping solve the problems that are emerging as this agentic web is happening. Yeah, it's really cool to see you guys, like, leaning really hard into MCP and, like, integrating it into all of Windows and all that kind of stuff. That's really awesome. And it brings up for me, I've been starting to hear rumblings from people who are thinking a lot about MCP that the security model needs a lot of work. Yeah. And I'm curious, like, for your take on that, because you're making a lot of comparisons between this stack and the internet stack, and the internet has a bunch of, like, things in its security model, like the same origin policy that makes sure that, like, if a website is serving you code, like it's only able to execute on its own data. Yep. And MCP doesn't really have that. So, like, how do you—what do you think the right security model is for this? Well, look, I don't know that I know what exactly the right security model is, but, like, the interesting thing about MCP is, like, it is so coherently simple that it's going to be relatively easy for the community to decide what the security model is. Like, you know, we have a bunch of, like, enterprise things that we care a lot about and that, like, we're doing really good work with the MCP team to get done. So, like, we need agents— Agents to have identities so that you can build entitlement systems. So you can say this agent is acting on behalf of this person, and, like, they are entitled to see these resources in this system. And, like, even having a way for an agent to sort of go query a bunch of systems and say, like, here's the thing that I would like to do. These are the systems I need to touch in order to do the thing. Like, what entitlements do I need to ask for in order to do this? And so I can request permission, like, from the user, like the person who's delegated this task to me, like, can I present to them, like, can I have permission to these things in order to do this thing you asked me to do, yes or no? And then for the administrators of all of these systems, you know, like, hey, is it okay for all of this to be happening? And so, like, there's all of that's going to be, like, relatively straightforward to do. Like, not easy, but, like, relatively straightforward to do on top of MCP. And, like, the important thing is, like, let's do it in an open way. Like, we don't need it to be proprietary to, like, our agents or our systems. Like, we've just got to figure out how to get this done where things kind of work like the web works. Yeah. Well, it's an interesting question for me because I feel like there's maybe two potential models or potential go-to-markets for AI stuff that you guys have been talking about. One is this sort of, like, verticalized model where you own the model and you own the UI layer, you do all the applications and everything in between. And the thing about that model, which maybe it's sort of, you could say the App Store, Apple iPhone model is a good example of that, is you can guarantee security in a lot of ways. And an open model, it's harder to do security stuff, but you get much more, like, innovation, basically, because there's no central authority. So how did you guys think about making that decision? Yeah. So, look, I know that that's the argument that a lot of people make. Yeah. I think it might be a false dichotomy. There is, you know, like, a thing that you have in these open systems where they are permissionless. Yeah. And, like, there's a real advantage in having permissionless innovation. So, like, the thing that— As an individual, that excites me most about what's happening right now is the extent to which you can go innovate and build things without having to seek someone's permission, like where you have to have them grant you permission for distributing your things to other people and, you know, like having all of these, like, complicated gatekeeping things that are sitting in between you, who are the person who had the idea, and, like, the people who might benefit from it. Like, I think some of these, like, middle layers that have emerged over the past handful of years, like, just aren't contributing much value, honestly, to the two parties in the transaction that matter, which is the person who did the hard work to make a thing and then the people who are going to either spend their attention or their money or some other currency that's valuable to, like, access the thing. So, like, I get kind of excited about that. And so, like, that's one of the reasons why we've made the decisions that we want to. But, like, I also think that there are ways that you can get real robust security in these systems, like leveraging some of the AI capability that you have now that, you know, where you may be able to have better security. Like, if you have an agent that you are running that is attending to your personal security requirements, like, these are things I'm willing to share, these are things I'm not willing to share, like, you know. And that has some kind of knowledge of risk assessment and, like, yeah, like, for instance, like my wife this morning, while I was, while I was getting ready to jump on stage, like I got this flurry of emails that, because I'm the, like, backup security account for my wife, where, like, somebody was, like, fiddling around with two-factor authentication on her account. And, like, the first thing I did was I texted her. Like, I didn't want to email her because somebody might have gained unauthorized access to her email account. I texted her. I was like, Hey, are you screwing around with the configuration here? She's like, Yes. And so, like, you could imagine, like, having an agent that is, like, privy to, like, a whole bunch of your communication modalities, like being able to, like, notice that something funky is going on and then, like, you know, using a bunch of resources to triangulate, like, whether that's legit activity or illegitimate activity. So, like, I think there's just a bunch of stuff like that that, like, you can have both, right? Like, I don't think it needs to be, like, you know, one or the other as you framed it. Yeah, that makes sense. One other thing that I'm curious about is it just seems pretty clear that software engineering is changing. Yeah. And you're someone who's been involved in software engineering for a long time. You're someone who also, I think, cares a lot about, like, the craft of things, like the craft of how things are made. We were talking earlier about you're making, you do a lot of ceramics, you make your own bags, like, you love having your hands in things. Yeah. And I think one of the knocks on, you know, using agents for coding is, like, it gets rid of some of that feeling or something like that, which I don't necessarily agree with, but I'm sort of curious for you, like, as someone who cares about the craft of code, looking into this future of coding with agents, like, how does that... of coding with agents, like, how does that—how do you feel about that? Well, so let me start by saying that I, I, I love the fact that my people—and, like, when I say my people, I mean, you know, makers at large, so software engineers or, you know, mechanical engineers or woodworkers or potters or, you know, just sort of pick your thing—where people are, you know, trying to create things from, you know, raw materials or nothing. If you are really passionate about what you do, you're going to have very strong opinions about how you do it, the tools that you use, the materials that you use, like how things get put together. It is a necessary thing for you to be great at your job. The interesting thing is people have lots and lots of different opinions, and like one of the events you said, like, I've been doing it for a long time. Like, I am—like, I'm an old fart. Like, I wrote my first program when I was 12, which means I've been programming for 41 years. And so the thing that you get to see when you've been doing a thing for a very long time is, like, this is not the first moment in the past four decades where the nature of software development has changed in a non-trivial way and where people have very strong opinions about the change and what it means. And so, yeah, I think the reality is that people will have choice. You know, like I still, when I go into a text editor—I probably shouldn't say this because, like, we make, you know, Visual Studio Code—like, I'm such an old recalcitrant fart that I still use VI. I use Vim at least. But, like, my text editor of choice is, like, this extremely antiquated thing, and, like, I just refuse to go use something different, even though I know for sure that that is sub-optimizing a part of what I'm doing, but I make the decision anyway because, like, I get to choose. And then in other aspects of my making, like either software or something else that I'm doing, like, I will be like, okay, the important thing here is not the way that I'm doing this particular part of it; it's the outcome that I'm trying to get to. And, like, I'm going to use the most powerful— Our most convenient way to go get to the outcome. And, like, you know, I don't care who's going to throw rocks at me for doing it. And, like, it's literally everywhere. Like, I've been a woodworker for almost as long as I've been a programmer. And when I was a teenager, like, the big debate was like, oh, are you a real woodworker if you use power tools? Like, you know, real woodworkers only use hand tools. There's still a little bit of that debate today, but, like, the real debate is like, are you a real woodworker if you use CNC tools, like computer-controlled power tools versus just power tools? And I understand it. Like, I actually think it's interesting, the debate itself. But, like, sometimes, like, people are going to make, you know, different choices because, like, they value something different than you do. If you value the process more than you value the outcome, like, sometimes you'll make different decisions than people who value the outcome more than the process. And I think the, like, is it, are you a real woodworker or a real programmer? You're sort of saying, like, you're only real if you do it the way I grew up doing it. Yeah, when you ask that question in a lot of ways, you know. But it's just so varied, right? And, like, so the thing that I will say is, like, I would never in a million years tell anyone not to have strong opinions about their craft. Like, have them. Like, it's great. Like, the advice that I would give people, and, like, this is not me telling, it's just advice, like things that I found useful for myself, is just have an open mind, you know, when the tools are changing. I can't even tell you, like, the number of times where I have looked at a new technology in some other, like, non-software dimension of making that came along where I'm like, like, I don't want to learn, like 3D printers. Like, I waited forever to learn how to use 3D printers, and— Like, I regret it. Like, I should have started earlier. Like, they're so damn useful for almost everything that I do. And for a whole variety of complicated reasons, like, I didn't let myself be curious about that, which is odd. And so, yeah, just, like, be curious. Try stuff. Like, and if it works for you, use it, and if it doesn't, don't. Yeah. What do you think is the future of software engineering agents? Like, is there going to be, like, one agent to rule them all, or is you're just going to use many different agents with different tastes? Or, like, how do you see that ecosystem shaping up? Yeah, look, I think it's going to be a lot of different agents. I mean, like, and it's good to have a lot of agents. And, like, we certainly would GitHub Copilot and the, you know, GitHub agent stuff that we're working on. Like, I think we will compete very hard to, like, be a tool that lots of people will choose because it's very useful to them. But I think it's unrealistic in the universe of developers to, like, think that, like, every developer on the planet is going to snap to using, like, one tool for, like, an important part of their job. Like, part of the joy of being a developer is you actually have that choice, and you can sort of choose and play around with a bunch of different things and, like, do irrational things and, like, do rational things. And, like, it's just, you know, it is one of the very consistent things that I've seen over the past four decades of my programming life is, like, people choose to change their tools all the time. What are the dimensions? Do you have an opinion on the dimensions along which the different agents might differ? Well, I think the most important thing about agents is, like, probably the product-making part of them. And so the most interesting startups that I'm seeing right now are not trying to— Innovate by building some kind of differentiated infrastructure. They're innovating because they think they have an understanding of a problem that someone has that is better than anyone else, and they think that they can pick up infrastructure or modify infrastructure or tune infrastructure to go solve their understanding of that problem in a world-class way. So I think that's what we need a lot of right now, and, like, that's what's going to dictate the diversity of agents and, like, how, like, which things get used for what. And I think, honestly, because it's so much easier now to, like, have that nuanced understanding of what someone's problem is and to pick up these tools to go take a swing at solving it, that you're just going to have a lot of companies, like, building a lot of things, trying to—you can even see it with the software development tools. It's, like, crazy how many things have come out over the past year, and, like, they're interesting, like all of them. Yeah, it's a lot to respond to when you're a company building software development tools yourself, but, like, it's super, super interesting. And it's, like, what we've seen is if you've got some kind of nuanced understanding of what someone needs, like, people have, like, high tolerance and, like, high interest in, like, giving things a try. Yeah. So we're almost out of time, but I'm curious, like, let's say it's a year from now, we're back at Build. Yep. What are some things that are a hot topic right now or big questions that people have right now that are not going to matter in a year? And what is going to matter in a year? And what are your predictions for what we're going to be talking about? Yeah, I think people who are still, like, hanging on to these ideas that, oh, like, the technology is not ready yet because, like, I, yeah, I tried to do something and it was, like, marginally too expensive or, like, it was marginally capable of, you know, doing the thing that I wanted to do. Like, I think anyone who is using those as excuses to wait to get started are going to be super behind because everything is going to get cheaper and everything is going to get more capable every year. I know, like, and I think this is actually not a hard sell in 2025. Yeah, it was this loud chorus of like, oh, you know, the progress is going to, you know, is about to end and, like, everything's going to stop and, like, everybody's going to be super disappointed. Like, I mean, there's still some people out there saying that, but, like, I don't think folks are paying much attention to them anymore. Mostly because, like, you know, what do you win by paying attention to, like, some crank who's saying, like, you know, the thing's about to stop? Like, you're sort of betting on failure, and the cost of betting on failure versus betting on optimism is, like, a real big difference there. So, yeah, like, I think we're going to see a ton of progress on, like, the level of ambition of problems that people are tackling with agents. And then I think, you know, modalities that are going to be really different is, like, as this agentic web starts to get more complete, more plumbed out, and the models' reasoning and planning capability get better and better, like, you're going to start to get to the point where you're able to go from this synchronous mode of interaction with agents to asynchronous. Like, right now, most of what people do is, like, they sort of sit down, like they got a thing, they want to do, like they issue the prompts, like, and they wait until, you know, the thing comes back and, like, you know, do something with that response. And so I think, you know, by next year, you're going to see people using these agents to, like, hey, go sort this out, and, like, the agent is going to take a lot of time. It's going to go make a lot of calls out to systems, like the things that it's sort of, like, taking action on are going to, like, take a while to come back. Then they're going to, like, integrate all of those responses and, like, do something, and, like, that whole thing may iterate a bunch of times. And then, you know, at some non-trivial amount of time later, you're going to sort of say, okay, like, here's as far as I got. Like, now it's your turn. Like, go take some action now. Sounds like a future I want to be in. Yeah. Yeah, me too, right? Well, Kevin, thank you so much. It was really great to talk to you. Good to talk to you as well. Thank you for having me on. Of course. Oh my gosh, folks, you absolutely positively have to smash that like button and subscribe to AI and I. Why? Because this show is the epitome of awesomeness. It's like finding a treasure chest in your backyard, but instead of gold, it's filled with pure unadulterated knowledge bombs about ChatGPT. Every episode is a roller coaster of emotions, insights, and laughter that will leave you on the edge of your seat, craving for more. It's not just a show; it's a journey into the future with Dan Shipper as the captain of the spaceship. So do yourself a favor, hit like, smash subscribe, and strap in for the ride of your life. And now, without any further ado, let me just say, Dan, I'm absolutely hopelessly in love with you. Fancy. That's how you know it's the real deal. Yeah, excellent.