alt Hacker NewsMicrosoft drops AI sales targets in half after salespeople miss their quotas
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AI agent technology likely isn’t ready for the kind of high-stakes autonomous business work Microsoft is promising.
It's unbelievable to me that tech leaders lack the insight to recognize this.
So how to explain the current AI mania being widely promoted?
I think the best fit explanation is simple con artistry. They know the product is fundamentally flawed and won't perform as being promised. But the money to be made selling the fantasy is simply too good to ignore.
In other words --- pure greed. Over the longer term, this is a weakness, not a strength.
Too much money being spent on a technology that isnt ready to do what they're saying it can do. It feels like the 3G era all over again. Billion spent on 3G licences which didnt deliver what they expected it would.
>> The Information notes that much of Microsoft’s AI revenue comes from AI companies themselves renting cloud infrastructure rather than from traditional enterprises adopting AI tools for their own operations.
And MS spends on buying AI hardware. That's a full circle.
I think MSFT really needs some validated user stories. How many users want to, "Improve my writing," "Create an image," "Understand what is changed" (e.g. recent edits), or "Visualize my data."?
Those are the four use cases featured by the Microsoft 365 Copilot App (https://m365.cloud.microsoft/).
Conversely, I bet there are a lot of people who want AI to improve things they are already doing repeatedly. For example, I click the same button in Epic every day because Epic can't remove a tab. Maybe Copilot could learn that I do this and just...do it for me? Like, Copilot could watch my daily habits and offer automation for recurring things.
If you click through to the article shared yesterday[0]:
> Microsoft denies report of lowering targets for AI software sales growth
This Ars Technica article cites the same reporting as that Reuters piece but doesn't (yet) include anything about MSFT's rebuttal.
Anyone who has had the pleasure of being forced to migrate to their new Fabric product can tell you why sales are low. It's terrible not just because it's a rushed buggy pile of garbage they want people to Alpha test on users but because of the "AI First" design they are forcing into it. They hide so much of what's happening in the background it is hard to feel like you can trust any of it. Like agentic "thinking" models with zero way to look into what it did to get to the conclusion.
The difference between poison and medicine is the amount. AI is great and very useful, but they want the AI to replace you instead of supporting your needs.
"AI everywhere" is worse than "AI nowhere". What we need is "AI somewhere".
Even Devblogs and anything related to Java,.NET, C++ and Python out of Redmond seems to be all around AI and anything else are now low priority tickets on their roadmaps.
No wonder there is this exhaustion.
Hearing similar stories play out elsewhere too with targets being missed left and right.
There’s definitely something there with AI but a giant chasm between reality and the sales expectations on what’s needed to make the current financial engineering on AI make any sense.
Super interesting how this arc has played out for Microsoft. They went from having this massive advantage in being an early OpenAI partner with early access to their models to largely losing the consumer AI space: Copilot is almost never mentioned in the same breath as Claude and ChatGPT. Though I guess their huge stake in OpenAI will still pay out massively from a valuation perspective.
Meanwhile, divisions that make actual products people wants are expected to subsidize the hype department: https://www.geekwire.com/2025/new-report-about-crazy-xbox-pr...
Despite having an unlimited warchest I'm not expecting Microsoft to come out as a winner from this AI race whilst having the necessary resources. The easy investment was to throw billions at OpenAI to gain access to their tech, but that puts them in a weird position of not investing heavily in cultivating their own AI talent and being in control of their own destiny by having their own horse in the race with their own SOTA models.
Apple's having a similar issue, unlimited wealth that's outsourcing to external SOTA model providers.
What can you even do in the ms enterprise ecosystem with their copilot integration?
Is it just for chatting? Is it a glorified RAG?
Can you tell copilot co to create a presentation? Make a visualisation in a spreadsheet?
But is it sold enough to regular Windows Home users? If MS brings an ultimatum: "you need to buy AI services to use Windows", they might get a bunch more clueless subscribers. In the same way as there's no ability to set up Windows without internet connection and MS account they could make it mandatory to subscribe to Copilot.
Hopefully this is the beginning of the trough of disillusionment, and the steady return of rationalism.
Have we finally reached peak AI already? In that event we will see the falling down phase next.
Good. Go make your OS useful and stop alienating your enterprise customers.
Why do they have salespeople when AI could have done the job?
I went to Ignite a few weeks ago, and the theme of the event and most talks was "look at how we're leveraging AI in this product to add value".
Separately, the theme from talking to Every. Single. Person on the buy-side was gigantic eye roll yes I cant wait for AI to solve all my problems.
Companies I support are being directed from their presidents to use ai, literally a solution in search of a problem.
People are wondering how we got here when these AI's make so many mistakes.
But the one thing they're really good at is marketing.
That's why it's all over linkedin etc, marketing people see how great it is and think it must be great at everything else too.
Is "The Information" credible? It's the sole source.
I wonder if it’s because Microsoft is hyper focused on a bunch of crap people don’t want or need?
[dead]
made up story
AI is people looking at EV hype and saying - I'll 100x it.
It has all the same components, just on much higher scale:
1. Billionaire con-man convincing large part of market and industry (Altman in AI vs Musk in EV) that new tech will take over in few years.
2. Insane valuations not supported by an actual ROI.
3. Very interesting and amazing underlying technology.
4. Governments jumping on the hype and enabling it.
I wonder what part of these failed sales is due to GDRP requirements in the IT enterprise industry. I have my own european view, and it seems our governments are treating the matter very seriously. How do you ensure an AI agent won't leak anything? It just so happened that it wiped entire database or cleared a disk and later being very "sorry" about it. Is the risk worth it?
As someone who appreciates machine learning, the main dissonance I have with interacting with Microsoft's implementation of AI feels like "don't worry, we will do the thinking for you".
This appears everywhere, with every tool trying to autocomplete every sentence and action, creating a very clunky ecosystem where I am constantly pressing 'escape' and 'backspace' to undo some action that is trying to rewrite what I am doing to something I don't want or didn't intend.
It is wasting time and none of the things I want are optimized, their tools feel like they are helping people write "good morning team, today we are going to do a Business, but first we must discuss the dinner reservations" emails.