Illustration by Tag Hartman-Simkins/Futurism. Source: Sven Hop/Picture Alliance via Getty Images
Microsoft continues to focus more and more on AI – almost certainly at the expense of its core products like the Windows operating system. And unfortunately for the Redmond giant, the move doesn’t seem to be paying off.
Current and former employees explain wall street journal In new reporting The company’s confusing branding and lack of cohesion between its products has left users frustrated and alienated. And data reviewed by the newspaper shows that only a small percentage of its enterprise customers prefer using its AI chatbot and assistant Copilot, which appears to be lagging behind its rivals at Google, OpenAI and Anthropic.
The report follows Microsoft’s historically bad day on the stock market last week, which saw its share price drop nearly 12 percent, indicating investor skepticism over CEO Satya Nadella’s AI-first vision and the company’s excessive spending in pursuit of it.
Microsoft is certainly giving OpenAI a run for its money in the bad-branding department. There are many versions of CoPilot across its various services and software – too many versions, you could argue. Do you need Microsoft 365 Copilot, or Microsoft 365 Copilot Chat? What about plain old Microsoft Copilot, or Microsoft Copilot Studio? If you are more savvy, you may prefer Github Copilot or Microsoft Security Copilot. Of course, these should not be confused with Microsoft CoPilot Pro, or its older offerings like CoPilot+ for PC. Hey, maybe those employees had a point!
The gist is that Co-Pilot is divided into different groups for different customers: one for general consumers, one for programmers and developers, and an enterprise Co-Pilot for companies and professionals.
Still, because it’s Microsoft, it can still bring in a larger user base, even if it’s going to shoot itself in the foot while wielding dual pistols. Last week, it reported that it had sold 15 million Microsoft 365 CoPilot “seats,” or annual users, out of 450 million Microsoft 365 business subscribers.
But that user base has started to decline, according to previously unreported data from market research firm Recon Analytics. Citing its survey of more than 150,000 US customers WSJ It revealed that from July 2025 to this January, the share of Copilot customers – like paying customers – who preferred to use it as their primary chatbot fell from 18.8 percent to 11.5 percent. Meanwhile, the share of people using Google Gemini Increased from 12.8 percent to 15.7 percent.
A note from analysts at Citi Research provides another brutal statistic: Some companies are only using about 10 percent of the Copilot subscription “seats” they paid for. WSJ’s Reporting. Customers complained that the Copilot versions were confusing, that they did not like having Copilot forced upon them, and that its various AI models were not well integrated with each other. If you want to take something you’re working on with your workplace AI and continue working with your consumer AI models, the experience will be frustrating and clumsy.
(A Microsoft spokesperson countered, without providing details.) WSJ“The pace of growth we are seeing is unlike anything seen before,” the report said.)
A place from where the copilot appears to be flying? Microsoft. Chief AI Transformation Officer – We assure you this is a real job title – Pam Maynard explains WSJ The adoption rate within Microsoft’s sales organization has increased from 20 percent to more than 70 percent in the last year. Maynard attributes this to employees becoming more comfortable with AI, but it’s also clear that company leadership has placed heavy pressure on technology adoption, with employees being asked to measure how well they’re using tools like Copilot at work, people familiar with the matter said. WSJ. (CEO Satya Nadella previously claimed that more than a quarter of the company’s code is written with AI.)
The survey findings will only add to investor uncertainty over Microsoft’s growing AI spending, which saw its stock slide after the release of its latest quarterly earnings last Thursday. They showed that although its net profit increased to $31 billion, its expenses increased by 66 percent to $37.5 billion. Taking further air out of the room, revenue growth in its Azure cloud computing segment, which is the backbone of many of its AI efforts, saw a disappointingly modest 38 percent increase in revenue, which was slightly worse than last year.
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