Satya Nadella Hails Analog Optical Computer for AI Future

On Wednesday, Nadella praised the breakthrough on X (formerly Twitter), calling it a major step forward in solving real-world problems. He emphasized that Microsoft’s research, published in the scientific journal Nature, demonstrates how analog optical computing could redefine efficiency in AI workloads and optimization challenges.

Built with Everyday Smartphone Components

The AOC was developed over four years using readily available technology, including micro-LED lights, smartphone camera sensors, and optical lenses. Unlike traditional digital systems that rely on binary data, the Analog Optical Computer processes information using light, enabling data transmission at the speed of photons.

Microsoft claims the prototype is up to 100x faster and 100x more energy efficient than modern digital systems such as GPUs, particularly for solving optimization problems. This innovation could allow industries to run large AI models, machine learning tasks, and digital twin simulations at a fraction of current energy costs.

Transforming AI, Healthcare, and Financial Services

The Microsoft research team tested the AOC across multiple sectors:

● Banking and Finance: In collaboration with Barclays, the AOC simulated complex transaction settlements involving thousands of trades, offering solutions that could streamline global financial operations.

● Healthcare & MRI Scans: By leveraging a digital twin of the AOC, researchers demonstrated the ability to reconstruct MRI scans faster, potentially reducing scan times from 30 minutes to as little as five minutes — a major breakthrough for healthcare technology.

● Artificial Intelligence: The AOC was mapped to early machine learning tasks, showcasing its potential to run large language models (LLMs) and future AI workloads with lower costs, greater speed, and minimal energy consumption.

Francesca Parmigiani, Microsoft’s principal research manager, highlighted that while the AOC is not yet a full general-purpose computer, it is well-suited for solving optimization-heavy tasks across industries. To accelerate adoption, Microsoft is releasing its optimization solver algorithm and a digital twin of the AOC, enabling organizations worldwide to test the technology virtually and explore new applications.

Despite short-term stock fluctuations — Microsoft shares dipped 5.65% in the past month — the company remains up over 20% year-to-date. With innovations like the Analog Optical Computer, Microsoft continues to strengthen its position as a global leader in AI, cloud computing, and next-generation technology solutions.