Bill Gates on Innovation

When Gates and Allen read about the Altair in January 1975, they understood that computer prices would soon fall far enough that selling software for them could be a real business, and they told MITS founder Ed Roberts they were developing a BASIC interpreter, though none existed, following the engineering custom of the trial balloon. Roberts agreed to a demonstration in March 1975, giving them weeks to deliver. Allen adapted an Intel 8008 emulator he had written for Traf-O-Data to simulate the 8080 on Harvard's PDP-10, and the pair developed and tested the interpreter there; Harvard officials were displeased but found no written policy against it, so debugging finished on time purchased from a Boston timesharing service. Monte Davidoff, a fellow student, argued for floating-point arithmetic and was hired to build it. The finished interpreter, with its own input-output system and line editor, fit in four kilobytes of memory.

Before Microsoft, there was Traf-O-Data, the 1970s partnership among Gates, Allen, and hardware builder Paul Gilbert. Roadway traffic counts were then recorded mechanically on paper tape, with time and axle counts punched as patterns, and state and local governments paid firms to process them; the two Lakeside students reasoned they could do the work cheaper and faster with a machine built on the newly announced Intel 8008 microprocessor. Neither knew hardware design, so Gilbert became the third partner and built a prototype that read the tape's hole patterns onto computer cards, while Gates used a University of Washington machine to produce the traffic-flow charts. The business achieved only modest success, but it mattered far beyond its revenue: Allen's 8008 emulator, written for Traf-O-Data, became the foundation on which the two simulated the Altair and wrote the BASIC interpreter that launched Microsoft.

Microsoft's graphical ambitions predated the Macintosh's success. Gates wanted a graphical user interface as early as 1981, and the spark came at COMDEX 1982, where he saw VisiCorp's Visi On suite demonstrated for IBM-compatible machines; a year later Microsoft learned Apple's GUI, built partly on Xerox PARC research, was far more advanced, and decided it had to differentiate. In August 1983 Gates recruited Scott McGregor, a key developer of PARC's original windowing system, to lead the Windows team, and the environment made its public debut at Fall COMDEX in November 1983, described as a device driver for MS-DOS 2.0 requiring 192 kilobytes of memory and two floppy drives. The retail version finally shipped on November 20, 1985, two years late, as a tiled-window shell over MS-DOS that reviewers received lukewarmly, criticizing its performance and thin software compatibility, though unlike Apple's closed Lisa it could immediately run existing DOS software.

TerraPower, the Bellevue-based nuclear reactor company Gates co-founded and chairs, began with a traveling-wave reactor design and a 2015 agreement with China National Nuclear Corporation to build a 600-megawatt prototype at Xiapu in Fujian province, with commercial plants planned for the late 2020s; the project was abandoned in January 2019 when the Trump administration restricted the necessary technology transfers. The company then won a October 2020 Department of Energy award, between $400 million and $4 billion over five to seven years, under the Advanced Reactor Demonstration Program for its sodium-cooled Natrium design. In June 2021 TerraPower and PacifiCorp, a Berkshire Hathaway Energy subsidiary, announced plans for a joint reactor, and on November 16, 2021, Kemmerer, Wyoming, was selected from four coal-reliant candidate towns. The 345-megawatt project, estimated at four billion dollars with the department covering half and Gates contributing a billion, broke ground in June 2024 and received its construction permit in March 2026, the first ever granted for a non-light-water reactor.

Gates committed Microsoft to the graphical interface years before it paid off. Computerworld noted in 1987 that he had pushed Windows almost fanatically for years while much of industry treated it as a joke, and a Microsoft manager later recalled that betting the company on it was an enormous wager. Windows 3.0, launched May 22, 1990, sold more than 100,000 copies in two weeks and pulled resources away from OS/2, the operating system Microsoft had been co-developing with IBM since an August 1986 agreement; in a May 16, 1991 internal memo, Gates declared the OS/2 partnership over and redirected the company to Windows and the Windows NT kernel, a switch developers who had backed OS/2 called the head-fake. By 1993 Windows was the world's most widely used graphical operating system, vindicating a decade of insistence. Windows 3.1 followed in March 1992 and sold more than three million copies in its first two months on the market.