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{{Main|Altair BASIC}}
[[File:Altair Computer Ad August 1975.jpg|thumb|right| An Altair 8800 kit with 8 KB of memory and Altair BASIC cost only $995 in August 1975.]]
In December 1974 Bill Gates was a student at [[Harvard University]] and Paul Allen worked for [[Honeywell]] in Boston. They saw the Altair 8800 computer in the January 1975 issue of ''Popular Electronics'' and knew it was powerful enough to support a [[BASIC]] interpreter.<ref>The January 1975 issue of ''Popular Electronics'' was published on November 29, 1974. [[:File:Copyright Popular Electronics 1975.jpg|Copyright record.]]</ref> They wanted to be the first to offer BASIC for the Altair computer, and the software development tools they had previously created for their [[Intel 8008]] microprocessor based [[Traf-O-Data]] computer would give them a head start.{{sfnp|Manes|Andrews|1994|pages=68–70}} While their friend, Paul Gilbert, was building the computer, Allen wrote a program that ran on a DEC [[PDP-10]] [[time-sharing]] computer that simulated the 8008 system. He also modified DEC's [[Assembly language|macro assembler]] to produce the machine code for the 8008 microprocessor. The Traf-O-Data software could be written and debugged before the computer hardware was complete.{{sfnp|Manes|Andrews|1994|pages=50–54}} Gates and Allen worked at TRW where they had unlimited access to a PDP-10.</ref>
 
Harvard had a [[Digital Equipment Corporation|DEC]] [[PDP-10]] that was available for student use. They would use it to develop BASIC.<ref name="harddrive PDP-10">{{cite book | last=Wallace | first=James | author2=Jim Erickson | title=Hard Drive: Bill Gates and the Making of the Microsoft Empire | publisher=John Wiley & Sons | year=1992 | pages=[https://archive.org/details/harddrivebillgat00wall_0/page/81 81–83] | isbn=0-471-56886-4 | url=https://archive.org/details/harddrivebillgat00wall_0/page/81 }}"When Harvard officials found out that he (Gates) and Allen had been making extensive use of the university's PDP-10 to develop a commercial product, they were not pleased." The computer was funded by the Department of Defense and was under the control of Professor Thomas Cheatham. "Although DARPA was funding the PDP-10 at Harvard, there was no written policy regarding its use."</ref> While Allen modified their development software for the new 8080 microprocessor, Gates began writing 8080 assembly language by hand on yellow legal pads. They enlisted another Harvard student, [[Monte Davidoff]], to write the math routines.{{sfnp|Manes|Andrews|1994|pages=50–54}}