If the early bing chat release helps them figure out how to decrease hallucinations (with the staggering amount of data they have no doubt collected) then it will be worth it to them. Even if they have to throw some people a few million dollars in libel settlements.

I don't think any of this is meaningfully hurting MSFT at this point, the attention these stories are getting is much lower than the attention that the original bing chat release has. And neither of those are significant compared to the attention copilot 365 will receive if it actually ends up being good.