Microsoft has certainly doubled down on generative AIespecially after In 2019, we are entering into a multi-billion dollar partnership with OpenAI. while co-founder Bill Gates was skeptical of the company’s initial $1 billion investment in OpenAIprimarily due to its non-profit business structure, the company has since integrated AI into its tech stack.
I reported recently Microsoft has earned about $30 billion from OpenAI Between 2023 and 2025 but somehow spent $100 billion from infrastructure to hosting to get there. So it’s unclear whether the company made bank on its big bet on artificial intelligence.
For context, Velloso worked at Microsoft for over 12 years as a Partner Director leading the innovation of artificial intelligence on Windows, including 4 years as Microsoft’s CEO. Satya Nadellatechnical advisor of He then led AI developer products at Google DeepMind, including the Gemini API, before moving to Google before his most recent stint as VP of Product for Developer Platform at Meta’s Superintelligence Labs.
That means the executive has worked at three of the top companies in the AI arms race, putting him in a unique position to comment on AI’s trajectory. Velloso listed several reasons why Microsoft missed its opportunity on the AI wave, including:
- You make Bing your biggest bet with AI. No percentage point of user share is raised from this investment
- You bet on Copilot with AI. Even if the distribution is massive, 3% of paying users don’t even use it and it’s already in their faces.
- Then you hire the wrong people and assign them to jobs they clearly can’t do. It gets worse.
- Your OEMs invest in NPUs that no one cares about for those on Windows/Office because no one cares.
- Your GitHub, which needs to thrive in the age of AI, falls below the 90% SLA.
Let’s see…1-You make Bing your biggest bet with AI. Not a single percentage point of user share rises from this investment2-You bet on Copilot with AI. Even if the distribution is massive, 3% of paying users don’t even use it and it’s already in their faces… https://t.co/jje7AncboGApril 9, 2026
The executive’s post at X gained some traction and attention, including from Microsoft’s head of communications, Frank X. Shaw. “As you know Matt, there are times when reality hits hard and when you’re working with some of these wildly impressive, long-serving people, you can just say congratulations on a great run and not be framed negatively. Shaw said as he defended the executives’ flight from the industry giant.
Velloso defended his point of view by comparing the shares of Google and Microsoft. According to the executive, by the time Google moved in 2024, Google’s stock had risen nearly 230%, while Microsoft’s remained at 0%.
I think the whole market is wrong about this too. But what do I know? I just saw both companies, how they work, their strengths and weaknesses.
Matt Velloso
During Microsoft’s Q3 FY26 earnings call, CEO Satya Nadella stated that the company now has more than 20 million enterprise customers. Microsoft Copilotthis represents a 33% increase in the platform’s user base from 15 million in January.
However, Velloso claims that not even 3% of paying customers use Copilot, “even though the distribution is massive and it’s pre-positioned in their face.” This coincides with a separate report suggesting that Only 3.3% of Microsoft 365 and Office 365 users who interact with Copilot Chat pay for italthough Microsoft spent $37.5 billion on AI-related efforts in the second quarter of FY26.
Microsoft’s AI strategy
At the beginning of the year Microsoft has promised to make Windows 11 even better by improving the overall user experience of the operating system. As part of ongoing Windows K2 OS overhaul and recovery initiative, Microsoft is reducing where Copilot and its integrations appear.
At the same time, tech giant Kopilot has overhauled its management with ex-Snap Jacob Andreou, who now leads Copilot’s consumer and commercial practices as executive vice president, reporting to Nadella. This frees Microsoft AI CEO Mustafa Suleiman from some of his duties and allows him to focus development of internal boundary AI models while chasing the desired super intelligence benchmark.
Over the past few months, investors have raised concerns about Microsoft’s excessive spending on artificial intelligence, questioning its ability to create a clear path to profitability. This is among the claims The AI bubble is about to burstprompting market analysts to predict that investor interest in artificial intelligence may wane and eventually be diverted to other profitable ventures in the near future.
Interestingly, some investors claim to like AI startups OpenAI and are emerging agents that can replace established fertility kits like Anthropic Microsoft 365 As Microsoft focuses on artificial intelligence. Microsoft plans to double down on AI efforts Invest up to $146 billion in infrastructure by 2026.
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