Microsoft has a problem because no one wants its AI

Reports from various sources suggest that Microsoft, under Satya Nadella's leadership, isn't making the best moves right now. In trying to align with the current technological trends, it has forgotten what users expect. This is negatively impacting the company's results, especially as the corporation is starting to lag behind the competition in terms of development.

Is Microsoft slowly losing the AI race?

A recent report by The Information detailed how Microsoft's internal AI efforts are going in the wrong direction. This is mainly due to reduced forecasts and sales targets for all Azure AI products. It also highlighted that the company's sales department is facing increasing problems due to a complete lack of demand. Microsoft denied those reports, but it can't ignore the growing market trends – everything points to Google Gemini's rapid growth.

However, Microsoft is still leading the way in developing generative AI, mostly because of its billion-dollar partnership with OpenAI. At the same time, Nadella is looking for ways to cut expenses, stating in a conversation with the CEO of Axel Springer that Microsoft's current size has become "a huge obstacle in terms of AI development." This likely suggests that the corporation will undergo further budget cuts, leading to the elimination of some positions.

Analysts are noticing that Microsoft is going all-in on an expensive partnership with NVIDIA, while Google is opting to do its own thing. Even though Microsoft might have taken the lead at first, Google is catching up fast with its reliable and unique solutions. Microsoft's financial instability (mainly caused by billion-dollar investments in OpenAI) is starting to worry its investors. Therefore, the CEO of OpenAI is forced to look for ways to monetize more quickly and effectively. This generates further losses and delays in delivering expected innovations and digital products.

Users are not very favorable towards Microsoft's actions and are starting to look for alternatives to Windows. They do not expect AI solutions from the operating system (these are often intrusive and annoying), but rather smooth operation and minimal software problems. Meanwhile, Bill Gates was telling companies not to get too carried away with the latest tech trends, warning that when the AI bubble bursts, everyone will feel the impact.

• Microsoft
• Windows
• tech
• AI / Artificial Intelligence