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Microsoft has a problem: lack of demand for its AI products

(www.windowscentral.com)
296 points mohi-kalantari | 5 comments | 08 Dec 25 16:54 UTC | HN request time: 0.195s | source
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neilalexander ◴[08 Dec 25 17:13 UTC] No.46194859[source]▶
I would think that if they actually spent the time and money fixing the core functionality of their core products (like Windows and Office) that they might have a much easier time promoting things like Copilot. Instead they leave their users wondering why they're so hell-bent on shoehorning AI into a Start menu that takes whole seconds longer to open than it should or into Windows Search that regularly fails to find installed programs or local files.
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coldpie ◴[08 Dec 25 17:30 UTC] No.46195067[source]▶
Microsoft is a public company. That means their primary product is not products or services, it's their stock. Selling products & services can be an advertisement for their stock, but there are other methods of convincing people to buy their stock, too. Currently the stock market only wants stocks that have "AI" associated with them. It doesn't matter whether users like it or not, because having a viable business is not what the stock market is currently focused on. So, Microsoft is doing what they need to do to sell their primary product: shove AI into everything.
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1. brookst ◴[08 Dec 25 17:55 UTC] No.46195424[source]▶
Are you saying they would rather double stock price than double revenue?
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2. coldpie ◴[08 Dec 25 18:01 UTC] No.46195511[source]▶
Sure. Decision makers are paid in stock price, not revenue. They would rather do whatever increases the stock price the most, with the least effort/expense.
3. graemep ◴[08 Dec 25 18:01 UTC] No.46195516[source]▶
Yyes, and prefer it to doubling profit or cashflow etc.

I have not looked at MS in particular, but generally that is what the remuneration of the people at the top of most public companies is most strongly linked to.

4. Maxatar ◴[08 Dec 25 18:27 UTC] No.46195824[source]▶
If you're someone who owns Microsoft, what option would you prefer?

1. Stock price remains the same but revenue doubles.

2. Revenue stays the same, but stock price doubles.

Assuming all else equal, and recognizing that this is absolutely a simplification, but if these were the two choices then it seems a no brainer that you'd go with option 2. Revenue is a means of increasing stock price.

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5. Marsymars ◴[08 Dec 25 18:54 UTC] No.46196164[source]▶
I guess it depends on what kind of investor you are.

If you're holding MS stock long-term, and you plan to gradually shift away from equities as you near retirement and then gradually liquidate your holdings to fund your retirement, juicing the stock in the short term does nothing for you.

If you're holding short-term, then you also need to sell the stock after it gets juiced, so that you can move your capital to not-yet-juiced stocks.