### Microsoft's AI Ambitions: Challenges and Customer Feedback

Microsoft's ambitious AI investment faces customer skepticism and internal frustration over its effectiveness and value.

### Microsoft's AI Ambitions: Challenges and Customer Feedback
* 🤖 Microsoft is investing heavily in generative AI tools like Copilot, but there's a **significant gap between the company's vision and customer experience**.
* 📊 Internal reviews revealed mixed feedback from customers, who appreciate features like **summarizing meetings** but criticize others, with one CIO comparing Copilot's PowerPoint generation to "**middle school presentations**."
* 🔒 A security issue has emerged, where Copilot's ability to **scan organizational data** has led to **sensitive information being exposed** due to **lax permission settings**.
* ⏳ Some companies are pausing their Copilot deployments to address these issues, which could **take years to resolve**.
* 💰 The cost of these tools is a major concern, with many questioning whether the investment is **justified** as Microsoft seeks to **add value to recoup its substantial expenditures**.
* 🌟 Despite the challenges, Microsoft remains committed to its AI strategy, viewing it as **revolutionary as the internet**, and is determined to **stay the course amidst investor skepticism**.
* 📈 The generative AI hype has significantly boosted Microsoft's valuation to **$3 trillion**, with major tech companies projected to spend **$300 billion** in capital expenditures next year.
* 👥 Employees express frustration over the focus on AI tools at the expense of other core business areas, with one noting a "**group delusion**" about AI's potential to **solve all problems**.

Microsoft is betting big on AI and spending billions to create generative AI tools like Copilot. The people who are working on the tools though told me there's a big gap right now between what the company envisions and what customers are actually experiencing. I'm Ashley

Stewart, and I cover tech for Business Insider from Seattle. So for this story, we reviewed internal emails and documents. We got a payroll spreadsheet where employees were sharing their salaries. We interviewed 15 Microsoft insiders, plus their customers and competitors. Here's what we found.

Customers like some of the features, like summarizing meetings and email threads. Some of the features they're not as excited about. In July, we heard about a CIO of a Pharmaceuticals company saying that the company was no longer going to use Copilot. Basically, he compared the

tool's ability to generate PowerPoints to basically creating middle school presentations. We've also heard about sort of a security issue, and that issue is more with how customers have set up permissions for their internal systems. Copilot can scan basically all of your organization's information and then pull

up insights for you, answer questions, but what that means for uh companies with lax permissions is sometimes Copilot was surfacing things like salary data or the CEO's emails, things that companies really don't want the average employee to be able to access. So we're hearing of

some customers pausing their deployments for them to fix this issue. The problem is the issue can take years to fix because of how these things work. The price I would say is the biggest complaint because people just in general are wondering if it's worth the money.

and Microsoft is racing to add value to those tools as it tries to recoup its own significant investments in building them. So Microsoft has made a big pivot internally toward AI. Of course, we heard about events during the initial excitement about co-pilot like cooking

for co-pilot where everybody got together and made ARR re that was made by the AI tool. You may have heard this word co-pilot, but one employee I talked to said it felt like there's a group delusion at Microsoft that these AI

tools are basically going to solve every problem, and that's created some frustration among employees who say that, you know, the bread and butter businesses of Microsoft aren't getting as many resources, as much attention. One person told me it felt like Microsoft could only look at one shiny object at a time.

The hype over generative AI has catapulted Microsoft to a $3 trillion valuation. We're seeing significant spending from companies like Amazon and Microsoft, Google, Meta. They are all projected by Morgan Stanley to spend $300 billion in capital expenditures in the next year alone, and I think in

general, we're just seeing a lot of questions from investors about whether all of this spending will actually pay off. Microsoft has no doubt heard about the complaints. They've heard the customer complaints. They see Wall Street losing faith a bit, but the sense I got is that at the top of the company, the

plan is just to stay the course. They see AI in general as as big as the invention of the internet, and as one executive told me, you know, no matter what's happening, they want to stay focused and and execute, and basically, hopefully, their bet will pay off.

Microsoft Is Betting Big On AI. Company Insiders Have Serious Doubts. | Business Insider

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Business Insider

Microsoft's Copilot: Customer Experience vs. Company Vision

Microsoft is heavily investing in AI, particularly generative AI tools like Copilot.

Research involved reviewing internal documents, payroll data, and interviewing Microsoft insiders, customers, and competitors.

Customers have mixed reactions; some appreciate features like meeting summarization, while others are less enthusiastic.

A pharmaceutical company CIO discontinued Copilot use, citing poor PowerPoint generation.

Security concerns exist due to Copilot's access to internal data and lax permission settings, leading to the exposure of sensitive information.

Copilot's Challenges: Pricing and Internal Concerns

Pricing is a major customer complaint; the value proposition is questioned.

Microsoft is actively trying to enhance Copilot's value to justify investments.

Internal concerns exist about over-reliance on AI, potentially neglecting other core businesses.

Employees express frustration about resource allocation, feeling that focus is too narrow.

Industry-Wide AI Investment and Microsoft's Strategy

Massive AI investment across tech giants (Amazon, Microsoft, Google, Meta) raises investor concerns about return on investment.

Microsoft acknowledges customer complaints and Wall Street's concerns.

Despite challenges, Microsoft plans to maintain its AI focus, viewing it as transformative as the internet.