alt Hacker NewsMicrosoft's Pivotal AI Product Is Running into Big Problems
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It is remarkable how during the last 25 years (approximately), Microsoft has been improving their ability to deliver first (or be among the first), followed by messing up the whole process so that late comers end up taking the crown jewels.
PDAs, mobile phones, tablets, tablets with detachable keyboards, managed OS userspace, HoloLens, the XBox mess, and now AI.
There certainly other examples that I failed to address.
This is what happens when divisions fight among themselves for OKRs and whatever other goals.
Microsoft's fumble here is pretty spectacular.
Back in early 2023, the state of google search was abysmal (despite that their leaders insisted it wasn't, it had become nearly unusable for me and I don't think was that unfounded of an opinion). Microsoft rolled out a new version of bing, which became bing chat - search worked for me again for a very brief window of time.
They could have pounced on this opportunity to take a big chunk out of google's search, because google didn't really catch up there til the AI overview was rolled out, and even that is notorious for having issues. Eventually chatGPT seems to have carved out some of this search space with web-search being native to the tools now.
But microsoft was way ahead of everyone here for a brief period! Instead they just rolled everything into bloatware vaguely called "Copilot" and called it a day.
Microsoft's focus was making it so that AI could allow unskilled workers to replace skilled workers. The hope was that everyone but sales/management could be offshored to SEA/India/etc and AI would somehow make up for the skill differential.
The successful AI companies are making it so that skilled workers can use AI as a tool to be more productive and efficient.
> push by Chief Executive Satya Nadella to transform Microsoft into an AI-first company
Why can't we have a 'user-first' company. Maybe think about the user of your products a wee tiny bit. But no, it is not to be.
They really dropped the ball on this - they are down ~12% for the year.
When they first started, they seemed to be firing on all cylinders and looked like they were going to be big winners, but the strategy has just been a slow motion car crash.
I wonder if Satya is the right person for Microsoft.
Don't worry, after a decade or two of having Windows reinstall and re-enable it every couple weeks against their users' wishes I'm sure they'll get the market penetration they're looking for...
I think the plain ordinary chatbot behind the Copilot on the desktop is fine, it seems like a skin around ChatGPT-5 in the "Smart" mode and in the "Search" mode it compares to Google's AI mode.
When it comes to anything multimodal it is an absolute disaster. Show it a photo of a plant for a plant id? Forget about it, just take a picture of the screen on your phone with Google Lens. If you ask it to draw something or make a Microsoft Word document you'll regret it.
For advice about how to do things on the command line or how bootstrap works or how to get out of a pickle you got yourself in Git it is great. It writes little scripts as well as anybody but you can't trust it to get string escaping right for filenames in bash scripts which is one reason I'd want help. For real coding I use Junie because I'm a Jetbrains enthusiast but other people seem to swear by Claude Code.
I do dread the day though when Microsoft decides to kill Copilot because I will miss it.
The 3.3% paid conversion is not great.
Believe it or not, the Recon Analytics trend is actually worse primary usage among Copilot subscribers dropped from 18.8% to 11.5% since July while Gemini climbed past it.
People who paid are leaving.
That's a churn problem.
The tell is buried in the article: workers who have access to Copilot, ChatGPT, and Gemini side by side choose ChatGPT and Gemini at higher rates.
Some companies are using 10% of their paid seats. Microsoft's CMO of AI says growth is "unlike anything we've seen before" but won't share the numbers.
That's the "we're thrilled with preorders" of AI.
This is the Ballmer story all over again.
- Massive distribution advantage
- Captive enterprise base
Windows Phone had carrier deals too.
The problem is the same: you can't mandate delight.
This part is laughable, can't believe it leaked:
> "About a year ago, Nadella sent a frustrated email to Rajesh Jha,
> executive vice president of experiences and devices, detailing an incident in which
> Nadella had asked the enterprise version of Copilot on the Edge browser
> to help with a public webpage he was on,
> but it couldn't fulfill his prompt"
Meanwhile, Anthropic ships Cowork after 10 days and it just explodes with the market.
The reality is that Copilot’s laughable performance is almost entirely unrelated to AI models not being good at X.
Every single thing Copilot does has been solved much better by other products.
However, Copilot fails in extremely ridiculous ways, at very basic tasks which such a product absolutely must nail.
Copilot should not have been released. A large majority of people involved have failed. People like managers, product managers etc should probably be fired. Technical leads equally so.
For everyone who has been building similar products it is immediately obvious that Copilot is sloppy, unfocused and unprofessionally executed.
People hate it, and for hood reason.
It just boggles the mind how they would go and release it, or that it even exists in its current form.
Those devs and managers rake in hundreds of thousands of dollars each, producing garbage that has been done better by dozens or hundreds of other teams
Bah
Maybe Microsoft needs to fix the cart before they put the jet engines on top of it and try to kill the horses off.
Go back to fixing what’s wrong with Windows, then worry about the AI software running on top of it and where you can add a value proposition, because right now the Windows value proposition is continuing to go right down the shitter as everyone flees Windows 11.
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The biggest issue I see is Microsoft's entire mentality around AI adoption that focuses more on "getting the numbers up" then actually delivering a product people want to use.
Most of the announcements I hear about Copilot, it's always how they've integrated it into some other piece of software or cut a deal with yet another vendor to add it to that vendors product offering. On the surface there's nothing wrong with doing that but that just seems to be the ONLY thing Microsoft is focused on.
Worse yet, most of these integrations seem like a exercise in ticking boxes rather than actually thinking through how integrating Copilot into a product will actually improve user experience. A great example was someone mentioned that Copilot was now integrated into the terminal app but beyond an icon + a chat window, there is zero integration.
Overall, MS just reeks of an organization that is cares more about numbers on a dashboard and pretty reports than they are on what users are actually experiencing.