Microsoft is facing difficulties.

After relying on OpenAI for a long time, Microsoft is falling behind its rival in the race to develop AI chatbots.

Copilot is central to Microsoft's AI strategy. However, efforts to build a competing tool like ChatGPT have faced numerous challenges.

In interviews with the WSJ , several current and former Microsoft employees acknowledged that Copilot's brand positioning strategy and interoperability issues have disappointed users. The rate of subscriptions and usage of Copilot compared to Gemini has been declining month after month.

In other words, Copilot is nothing short of a headache for CEO Satya Nadella, whose vision is to make Microsoft an AI-centric company. According to several executives, Copilot is one of his top priorities.

Microsoft's dilemma

Microsoft's stock plummeted after the latest quarterly earnings report. Investors are concerned about the slow growth rate at Azure, the company's most important business segment. The AI ​​division remains reliant on OpenAI, while Copilot has yet to prove its effectiveness.

According to the WSJ , Microsoft shares fell nearly 3% in trading on February 3rd, amid a downturn in the software market due to concerns that AI tools would undermine demand for enterprise software subscriptions.

"We've moved past the first phase of AI exploration ," Nadella shared in a December 2025 article. He added that the industry is entering a phase of "distinguishing between showmanship and substance."

Despite lagging behind in the chatbot race, Microsoft still earns billions of dollars from cloud computing demand for AI, maintaining its position as one of the world's most valuable companies.

An advertisement for the Copilot computer is displayed in a Microsoft store. Photo: WSJ .

Analysts believe Microsoft has an advantage in narrowing the gap with competing chatbots, due to the hundreds of millions of business users who utilize Microsoft software. This represents a significant potential customer base for the company to promote its new AI product.

Chad A. Morganlander, a portfolio manager at Washington Crossing Advisors, said that while Copilot is facing difficulties, Microsoft still has an advantage thanks to its large base of loyal customers and strong financial resources for the long haul.

Copilot versions are integrated into many Microsoft applications, such as the Microsoft 365 suite (Word, Excel, PowerPoint...), in addition to the GitHub programming platform. Another version is integrated as a chatbot in the Edge browser.

There are three main types of Copilot: enterprise tools sold to companies and professionals, Copilot for programmers and IT professionals, and finally, chatbots for general users. This division is led by Mustafa Suleyman, Director of AI at Microsoft.

Suleyman joined Microsoft in 2024 to oversee AI products for consumers, building models that could compete with rivals. To date, Microsoft still relies on OpenAI and Anthropic for its Copilot services.

Why Copilot is hated

In the most recent quarter, Microsoft announced the sale of 15 million Copilot licenses to businesses using Microsoft 365. At the end of last year, the company recorded over 150 million monthly active Copilot users. This compares to 650 million for Google Gemini and approximately 900 million weekly active users for ChatGPT.

Data from third-party research firms shows that many Copilot users, including business account holders, are increasingly favoring competitor-developed products.

From July 2025 to the end of January this year, the percentage of people using Copilot as their primary tool decreased from 18.8% to 11.5%, according to a survey by Recon Analytics conducted on more than 150,000 respondents in the US. The percentage for Gemini increased from 12.8% to 15.7%.

Some reasons why Copilot is not preferred include the availability of better quality chatbots, a poor user experience, and limited usage limits. Data shows that among employees with Copilot, ChatGPT, and Gemini accounts, they have a higher rate of choosing ChatGPT and Gemini.

Market share of some popular AI chatbots is based on user preferences. Photo: WSJ .

According to Citi Research , some companies that purchased the Copilot package reported that only 10% of their employees were using it. Analysts suggest that "unorganized data repositories" are the problem with Copilot.

In an interview, Jared Spataro, Director of AI Marketing at Microsoft, stated that Microsoft 365 Copilot's daily active users increased tenfold last year, outperforming other services in the Microsoft 365 suite.

"We're seeing the highest growth rate ever," Spataro countered the data from Citi Research , although he didn't specify a particular number.

According to internal sources, a survey from Microsoft revealed that users are having difficulty distinguishing between different versions of Copilot. Some users reported that Copilot automatically installs on their devices and displays on everything from documents to web browsers.

Another issue is the lack of seamless experience across different versions of Copilot. CEO Satya Nadella has personally complained about this. Although it has been partially resolved, users are still not completely satisfied.

Recently, a tool from Anthropic called Claude Cowork has been highly praised for its ability to work seamlessly across multiple Microsoft 365 applications. Microsoft executives are reportedly discussing developing a similar product to Cowork.

Microsoft's strategy

According to Spataro, separating Copilot for enterprise and individual users helps to clearly distinguish work data from personal data. However, some employees have stated that the division between the individual and enterprise Copilot development teams makes it difficult to unify their vision.

Microsoft's plans to develop its own model were also hampered by a shortage of computing power. The company had to allocate time to operating servers, serving OpenAI, and Azure customers. In internal tests, Microsoft's model ranked significantly lower than its competitors.

In its latest financial report, Microsoft emphasized that it is allocating more computing power to improve Copilot. However, according to a note from investment firm UBS, shareholders are not yet fully convinced by this trade-off.

Scott Guthrie, Vice President of Cloud and AI at Microsoft. Photo: Shutterstock .

Microsoft's rare success in encouraging the use of Copilot came from within. According to WSJ sources, Nadella urged leaders and employees to make the most of AI tools, asking them to quantify how they use tools like Copilot in their workflows.

After laying off more than 15,000 employees last year, Microsoft has been providing intensive training for software engineers, designers, and product managers to familiarize themselves with AI tools, aiming to leverage AI for greater efficiency.

Katy George, vice president of workforce transformation at Microsoft, revealed company research showing that the level of frequent AI use correlates with success in departments such as sales.

While it may attract employees to use and improve the product, Microsoft still needs individual and business users to choose Copilot.

To achieve this goal, Microsoft is not afraid to invest in increasing brand awareness. According to iSpot , the company has spent approximately $60 million advertising Copilot on TV by 2025. For comparison, the cost of promoting Copilot on LinkedIn is less than $1 million .

Microsoft plans to air a Copilot ad during Super Bowl 2026, which will take place this weekend. This will be the company's second ad at the event since 2024. A 30-second in-game ad could cost over $8 million .

Source: https://znews.vn/microsoft-gap-kho-post1625310.html