Kevin Scott

Where does value accrue? Scott’s core call: “models aren’t products” — models are “super valuable but they’re only valuable to the extent that you can connect them to things that users need via product,” and “in the limit I think product is the most important thing.” Infrastructure and compute monetize along the way, but “we don’t build infrastructure just for the sake of infrastructure.” Harry’s confusion is characteristic of the moment — every paradigm shift (internet, mobile) starts this way, and “very few of those ideas were actually the durable ones.”

On scaling walls: “that’s a ridiculous statement” — “I can very clearly see what we’re doing now and what we’re doing next and I don’t see the limit to the scaling laws.” His hedge is economic, not technical: there will eventually be a point of diminishing returns where “it’s so expensive that we will decide it’s not worth spending that next dollar to make this thing one unit smarter” — but “it’s not in the viewfinder right now.”

On DeepSeek R1: “we’ve had models more interesting than DeepSeek R1 that we chose not to even launch.” It was “good solid technical work,” but just “a point on a line of price performance improvement that maybe was invisible to everyone else” — inference price-performance improves much more through software than through the ~2x-per-generation hardware gain. And the surprise itself was the tell: “we should really really really respect the capability of Chinese entrepreneurs, scientists and engineers… that shouldn’t have been surprising.”

The agent thesis: memory is the piece “conspicuously missing” that makes agents “awfully transactional” — he expects it to get much better over the next year, and he hopes for more asynchronous dispatch (“you sort of dispatching your agent to go do something… while you are not paying attention”). The trajectory: 5-second tasks → 5-minute tasks → delegation “the same way that you would to a coworker.” And it’s many agents, not one — because product managers will probably have to be domain experts, helping set up agents’ feedback loops.

95% of net new code will be AI-generated in five years, “very little… line by line human written” — but “the more important and interesting part of authorship is still going to be entirely human.” It’s the assembly-to-high-level-language transition again (“there were some old farts who would say you’re not a real programmer… nobody talks about that anymore), and he hopes small teams will be able to do big things more easily: “you can do a lot with 10 really great super motivated engineers.”

Positioning tells from the quick-fire: the competitor he most respects is maybe Anthropic (“I think Dario’s doing a good job”); “frontier models are probably better health diagnosticians than your average GP” already; and his biggest learning from the program’s first year: “there’s a bigger gap than there was even two years ago between what the most capable frontier models can do and what they’re being used for.”

🔗 Original source & video: Kevin Scott, CTO @ Microsoft: An Evaluation of Deepseek and How We Underestimate the Chinese