Bill Gates Revisits Microsoft's Historic 1997 Rescue of Apple
As Apple recently celebrated its 50th anniversary, Microsoft co-founder Bill Gates has reflected on one of the most critical moments in the company's history: the 1997 intervention that saved Apple from potential bankruptcy. In an interview with Axios around the release of his memoir, Source Code, last year, Gates revisited this corporate turning point, emphasizing its lasting impact on the technology industry.
The $150 Million Lifeline That Changed Tech History
During the conversation, Gates detailed Microsoft's pivotal role in 1997, when it invested $150 million in the struggling Apple and pledged ongoing support for its software development. This move came at a time when Apple was facing severe financial difficulties and an uncertain future. Gates expressed no regrets about the decision, stating, "It was good that Apple recovered and made incredible contributions." He acknowledged that fifty years later, this intervention stands as one of the most consequential decisions in tech history.
Gates elaborated on Apple's evolution, noting that before the mobile revolution, Apple operated in a more niche market. "Once you get to the mobile thing, then Apple becomes every bit as important as Microsoft. It wasn't up until then. They were more of a niche," he explained. This perspective highlights how the 1997 rescue helped position Apple for its future smartphone dominance.
A Costly Mistake: Selling Microsoft's Apple Stake
Despite the successful rescue, Gates admitted to one significant regret: Microsoft's decision to sell its 5% stake in Apple, which was acquired as part of the 1997 deal. "I wish we'd maintained that 5% ownership. It was foolish, foolish to sell it," Gates confessed. He attributed the sale to antitrust concerns at the time, noting that "we sold it for what now looks like nothing." Gates also mentioned that Microsoft briefly owned part of Facebook, providing context about the company's investment strategies during that era.
The 'Wizard-Like' Relationship with Steve Jobs
Beyond the financial rescue, Gates delved into his complex and often competitive relationship with the late Apple co-founder Steve Jobs. He described their dynamic as "wizard-like," portraying Jobs as a "singular figure" unlike anyone else in the industry. "He should have been an actor. He really ran the reality distortion field like no one else," Gates remarked, referencing Jobs' legendary ability to persuade and inspire.
Direct Confrontations and Blunt Assessments
Gates recalled telling Jobs directly about their differing approaches: "Look, I'm a minor wizard. You're a major wizard. You can cast spells I can't cast — but because I'm a minor wizard, your spells don't work on me. I see the bullshit, that you're just mesmerizing these people." This candid exchange illustrates the tension and mutual respect that defined their interactions.
Another memorable confrontation occurred when Jobs unveiled the NeXT computer, which he developed after being ousted from Apple in the 1980s. Gates did not hold back his criticism, telling Jobs bluntly: "This thing is a slow, expensive computer with an overpriced black case." The NeXT computer ultimately struggled in the market, validating Gates' assessment at the time.
Legacy of a Corporate Rescue
The 1997 Microsoft-Apple deal not only provided immediate financial relief but also included a commitment to develop Microsoft Office for Mac for five years, ensuring Apple's software ecosystem remained competitive. This partnership helped stabilize Apple during a critical period, allowing it to refocus on innovation that would later lead to groundbreaking products like the iPod, iPhone, and iPad.
Gates' reflections come at a symbolic time as Apple marks five decades of existence. His insights reveal how a single corporate decision can reshape an entire industry, demonstrating the interconnected nature of tech giants' histories. The story serves as a powerful reminder of how competition and collaboration can coexist in the technology sector, driving progress and transformation.
