Microsoft drops AI sales targets in half after salespeople miss their quotas
arstechnica.com
arstechnica.com
This appears everywhere, with every tool trying to autocomplete every sentence and action, creating a very clunky ecosystem where I am constantly pressing 'escape' and 'backspace' to undo some action that is trying to rewrite what I am doing to something I don't want or didn't intend.
It is wasting time and none of the things I want are optimized, their tools feel like they are helping people write "good morning team, today we are going to do a Business, but first we must discuss the dinner reservations" emails.
The one time I thought it could be useful, in diagnosing why two Azure services seemingly couldn't talk to each other, it was completely useless.
I had more success describing the problem in vague terms to a different LLM, than an AI supposedly plugged into the Azure organisation that could supposedly directly query information.
The goal is AI everywhere, so this means top-down everyone will implement it and will be rewarded for doing so, so thrre are incentives for each team to do it - money, promotions, budget.
100 teams? 100 AI integrations or more. It's not 10 entry points as it should be (maybe).
This means for a year or more, a lot of AI everywhere, impossible to avoid, will make usability sink.
Now, if this was only done by Microsoft, I would not mind. The issue is that this behavior is getting widespread.
Things are becoming increasingly unusable.
Some stuff that used to work well with smart autocomplete / intellisense got worse with AI based autocomplete instead, and there isn't always an easy way to switch back to the old heuristic based stuff.
You can disable it entirely and get dumb autocomplete, or get the "AI powered" rubbish, but they had a very successful heuristic / statistics based approach that worked well without suggesting outright rubbish.
In .NET we've had intellisense for 25 years that would only suggest properties that could exist, and then suddenly I found a while ago that vscode auto-completed properties that don't exist.
It's maddening! The least they could have done is put in a roslyn pass to filter out the impossible.
This task cannot be accomplished
USING
standard SQL queries against the provided database schema. Replication slots
managed through PostgreSQL system views AND functions,
NOT through user-defined tables. Therefore,
I must return
```{{ .default .Values.whatever 10 }}``` instead of the correct ```{{ default 10 .Values.whatever }}```.
Pure garbage which should be solved by now. I don't understand how it can make such a mistake.
And when you try to make it something useful, the response is usually "I can't do that"
I can't do that.
that's the one use case where LLM is helpful!
“I am going to give you the problem I have. I want you to help me work backwards step by step and give me the AWS cli commands to help you troubleshoot. I will give you the output of the command”.
It’s a combination of advice that ChatGPT gives me and my own rubberducking.
Tech has always had a culture of aiming for "frictionless" experiences, but friction is necessary if we want to maneuver and get feedback from the environment. A car can't drive if there's no friction between the tires and the road, despite being helped when there's no friction between the chassis and the air.
Friction isn't fungible.
John Dewey described this rationale in Human Nature and Conduct as thinking that "Because a thirsty man gets satisfaction in drinking water, bliss consists in being drowned." He concludes:
”It is forgotten that success is success of a specific effort, and satisfaction the fulfillment of a specific demand, so that success and satisfaction become meaningless when severed from the wants and struggles whose consummations they are, or when taken universally.”
In "Mind and World", McDowell criticizes this sort of thinking, too, saying:
> We need to conceive this expansive spontaneity as subject to control from outside our thinking, on pain off representing the operations of spontaneity as a frictionless spinning in a void.
And that's really what this is about, I think. Friction-free is the goal but friction-free "thought" isn't thought at all. It's frictionless spinning in a void.
I teach and see this all the time in EdTech. Imagine if students could just ask the robot XYZ and how much time it'd free up! That time could be spent on things like relationship-building with the teacher, new ways of motivating students, etc.
Except...those activities supply the "wants and struggles whose consummations" build the relationships! Maybe the robot could help the student, say, ask better questions to the teacher, or direct the student to peers who were similarly confused but figure it out.
But I think that strikes many tech-minded folks as "inefficient" and "friction-ful". If the robot knows the answer to my question, why slow me down by redirecting me to another person?
This is the same logic that says making dinner is a waste of time and we should all live off nutrient mush. The purposes of preparing dinner is to make something you can eat and the purpose of eating is nutrient acquisition, right? Just beam those nutrients into my bloodstream and skip the rest.
Not sure how to put this all together into something pithy, but I see it all as symptoms of the same cultural impulse. One that's been around for decades and decades, I think.
Nobody woke up in 2005 thinking "I wish I could outsource my spatial navigation to a device." They just wanted to not be lost. But now a generation has grown up without developing spatial awareness.
I appreciate the way you distinguish this from actual revealed preference, which I think is key to understanding why what tech is doing is so wrong (and, bluntly, evil) despite it being what "people want". I like the term "revealed impulse" for this distinction.
It's the difference between choosing not to buy a bag of chips at the store or a box of cookies, because you know it'll be a problem and your actual preference is not to eat those things, and having someone leave chips and cookies at your house without your asking, and giving in to the impulse to eat too many of them when you did not want them in the first place.
Example from social media: My "revealed preference" is that I sometimes look at and read comments from shit on my Instagram algo feed. My actual preference is that I have no algo feed, just posts on my "following" tab, or at least that I could default my view to that. But IG's gone out of their way (going so far as disabling deep link shortcuts to the following tab, which used to work) to make sure I don't get any version of my preference.
So I "revealed" that my preference is to look at those algo posts sometimes, but if you gave me the option to use the app to follow the few accounts I care about (local businesses, largely) but never see algo posts at all, ever, I'd hit that toggle and never turn it off. That's my actual preference, despite whatever was "revealed". That other preference isn't "revealed" because it's not even an option.
This is the problem. Learning to embrace boredom is best thing I have ever done.
A responsible farmer is a steward of the local ecology, and there's an "ecology of friction" here. The fertilizer company doesn't say "well, the plants absorbed it." But tech companies do.
There's something puritanical about pointing to "revealed preference" as absolution, I think. When clicking is consent then any downstream damage is a failure of self-control on the user's part. The ecological cost/responsibility is externalized to the organisms being disrupted.
Like Schopenhauer said: "Man kann tun, was er will, aber er kann nicht wollen, was er will." One can do what one wants, but one cannot will what one wants.
I wouldn't go as far as old Arthur, but I do think we should demand a level of "ecological stewardship". Our will is conditioned by our environment and tech companies overtly try to shape that environment.
I'm completely happy to hand over menial side-quest programming goals to an AI. Things like stupid little automation scripts that require a lot of learning from poor docs.
But there's a much bigger issue with tech products - like Facebook, Spotify, and AirBnB - that promise lower friction and more freedom but actually destroy collective and cultural value.
AI is a massive danger to that. It's not just about forgetting how to think, but how to desire - to make original plans and have original ideas that aren't pre-scripted and unconsciously enforced by algorithmic control over motivation, belief systems, and general conformity.
Tech has been immensely destructive to that impulse. Which is why we're in a kind of creative rut where too much of the culture is nostalgic and backward-looking, and there isn't that sense of a fresh and unimagined but inspiring future to work towards.
ED Tech for example I think really seems to neglect the kind of bonds that people form when they go through difficult things together, and the pushing through difficulties is how we improve. Asking a robot xyz does not improve ourselves. AI and LLMs do not know how to teach, they are not Socratic pushing and prodding at our weaknesses and assessing us to improve. The just say how smart we are.
And - for myself, it was friction that kickstarted my interest in "tech" - I bought a janky modem, and it had IRQ conflicts with my Windows 3 mouse at the time - so, without internet (or BBS's at that time), I had to troubleshot and test different settings with the 2-page technical manual that came with it.
It was friction that made me learn how to program and read manuals/syntax/language/framework/API references to accomplish things for hobby projects - which then led to paying work. It was friction not having my "own" TV and access to all the visual media I could consume "on-demand" as a child, therefore I had to entertain myself by reading books.
Friction is good.
Friction is an element of the environment like any other. There's an "ecology of friction" we should respect. Deciding friction is bad and should be eradicated is like deciding mosquitoes or spiders or wolves are bad and should be eradicated.
Sometimes friction is noise. Sometimes friction is signal. Sometimes the two can't be separated.
I learned much the same way you did. I also started a coding bootcamp, so I've thought a lot about what counts as "wasted" time.
I think of it like building a road through wilderness. The road gets you there faster, but careless construction disturbs the ecosystem. If you're building the road, you should at least understand its ecological impact.
Much of tech treats friction as an undifferentiated problem to be minimized or eliminated—rather than as part of a living system that plays an ecological role in how we learn and work.
Take Codecademy, which uses a virtual file system with HTML, CSS, and JavaScript files. Even after mastering the lessons, many learners try the same tasks on their own computers and ask, "Why do I need to put this CSS file in that directory? What does that have to do with my hard drive?"
If they'd learned directly on their own machines, they would have picked up the hard-drive concepts along the way. Instead, they learned a simplified version that, while seemingly more efficient for "learning to code," creates its own kind of waste.
But is that to say the student "should" spend a week struggling? Could they spend a day, say, and still learn what the friction was there to teach? Yes, usually.
You are positing that we are active learners whose goal is clarity of cognition and friction and cognitive-struggle is part of that. Clarity is attempting to understand the "know-how" of things.
Tech and dare I say the natural laziness inherent in us instead wants us to be zombies being fed the "know-that" as that is deemed sufficient. ie the dystopia portrayed in the matrix movie or the rote student regurgitating memes. But know-that is not the same as know-how, and know-how is evolving requiring a continuously learning agent.
I feel like that describes nearly all of the "productivity" tools I see in AI ads. Sadly enough, it also aligns with how most people use it, in my personal experience. Just a total off-boarding of needing to think.
Sheesh, I notice I also just ask an assistant quite a bit rather than putting effort to think about things. Imagine people who drive everywhere with GPS (even for routine drives) and are lost without it, and imagine that for everything needing a little thought...
We’ve went from conceiving of software as tools - constructs that enhance and amplify their user’s skills and capabilities - to magic boxes that should aim to do everything with just one button (and maybe even that is one action too many).
This shift in thinking is visible in how junior designers and product managers are trained and incentivized to think about their work. “Anticipating the user’s intent”, “providing a magical experience”, “making the simplest, most beautiful and intuitive product” - all things that are so routine parlance now that they sound trite, but that would make any software designer from the 80s/90s catatonic because of how orthogonal they are to good tool design.
To caricature a bit, the industry went from being run by people designing heavy machinery to people designing Disneyland rides. Disneyland rides are great and have their place, but you probably don’t want your tractor to be designed like one.
https://x.com/satyanadella/status/1996597609587470504
Just 22 hours ago... https://news.ycombinator.com/item?id=46138952
This the nightmare scenario with AI, ie people settling for Microsoft/OpenAI et al to do the "thinking" for you.
It is alluring but of course it is not going to work. It is similar to what happened to the internet via social media, ie "kickback and relax, we'll give you what you really want, you don't have to take any initiative".
My pitch against this is to vehemently resist the chatbot-style solutions/interfaces and demand intelligent workspaces:
Although I imagine a version where AI drives humans who mindlessly trust them to be more vegetarian or take public transport, helping save the environment (an ironic wish since AI is burning the planet). Of course "AI" is being guided by their owners, so there'd be a camp who uses Grok who'll still drive SUVs, eat meat, and be racist idiots...
> It is wasting time and none of the things I want are optimized, their tools feel like they are helping people write "good morning team, today we are going to do a Business, but first we must discuss the dinner reservations" emails.
My comment is for coding, but same opinion for writing emails - once in a blue moon, then I will use a LLM manually.
https://www.techspot.com/news/102873-microsoft-now-security-...
Job security.
It's unbelievable to me that tech leaders lack the insight to recognize this.
So how to explain the current AI mania being widely promoted?
I think the best fit explanation is simple con artistry. They know the product is fundamentally flawed and won't perform as being promised. But the money to be made selling the fantasy is simply too good to ignore.
In other words --- pure greed. Over the longer term, this is a weakness, not a strength.
It will hurt, and they'll scare us with the idea that it will hurt, but the secret is that we get to choose where it hurts - the same as how they've gotten to choose the winners and losers for the past two decades.
"How Short Term Thinking Won" - https://youtu.be/qGwU2dOoHiY
The author argues that this con has been caused by three relatively simple levers: Low dividend yields, legalization of stock buybacks, and executive compensation packages that generate lots of wealth under short pump-and-dump timelines.
If those are the causes, then simple regulatory changes to make stock buybacks illegal again, limit the kinds of executive compensation contracts that are valid, and incentivize higher dividend yields/penalize sales yields should return the market to the previous long-term-optimized behavior.
I doubt that you could convince the politicians and financiers who are currently pulling value out of a fragile and inefficient economy under the current system to make those changes, and if the changes were made I doubt they could last or be enforced given the massive incentives to revert to our broken system. I think you're right that it will take a huge disaster that the wealthy and powerful are unable to dodge and unable to blame on anything but their own actions, I just don't know what that event might look like.
Genuine question, I don't understand the economics of the stock market and as such I participate very little (probably to my detriment) I sort of figure the original theory went like this.
"We have an idea to run a for profit endeavor but do not have money to set it up. If you buy from us a portion of our future profit we will have the immediate funds to set up the business and you will get a payout for the indefinite future."
And the stock market is for third party buying and selling of these "shares of profit"
Under these conditions are not all stocks a sort of millstone of perpetual debt for the company and it would behoove them to remove that debt, that is, buyback the stock. Naively I assume this is a good thing.
The short answer is that the trend of frequent stock buybacks as discussed here is not being used to "eliminate debt" (restore private ownership), it's being used to puff up the stock price as a non-taxable alternative to dividend payouts (simply increasing the stock price by reducing supply does not realize any gains, while paying stockholders "interest" directly is subject to income tax). This games the metric of "stock price", which is used as a proxy for all sorts of things including executive performance and compensation.
We're headed for a crunch anyway. My observation is that a controlled demolition has been attempted several times over the past few years, but in every instance, someone has stepped up to cry about the disaster that would occur if incumbents weren't shored up. Of course, that just makes the next occurrence all the more dire.
So with AI, the way the natural conspiracy works out is like this. Leaders at the top might suspect it's bullshit, but don't care, they always fail upwards anyway. Middle management at non-tech companies suspect their jobs are in trouble on some timeline, so they want to "lead a modernization drive" to bring AI to places they know don't need it, even if it's a doomed effort that basically defrauds the company owners. Junior engineers see a tough job market, want to devalue experience to compete.. decide that only AI matters, everything that came before is the old way. Owners and investors hate expensive senior engineers who don't have to bow and scrape, think they have to much power, would love to put them in their place. Senior engineers who are employed and maybe the most clear-eyed about the actual capabilities of technology see the writing on the wall.. you have to make this work even if it's handed to you in a broken state, because literally everyone is gunning for you. Those who are unemployed are looking around like well.. this is apparently the game one must play. Investors will invest in any horrible doomed thing regardless of what it is because they all think they are smarter than other investors and will get out in just in time. Owners are typically too disconnected from whatever they own, they just want to exit/retire and already mostly in the position of listening to lieutenants.
At every level for every stakeholder, once things have momentum they don't need be a healthy/earnest/noble/rational endeavor any more than the advertising or attention economy did before it. Regardless of the ethics there or the current/future state of any specific tech.. it's a huge problem when being locally rational pulls us into a state that's globally irrational
The timeframe of expectations have just shifted, as everyone wants to experience everything. Just knowing the possibility of things that can happen already affects our desires. And since everyone has a limited time in life, we try to maximize our opportunities to experience as many things as possible.
It’s interesting to talk about this to older generation (like my parents in their 70s), because there wasn’t such a rush back then. I took my mom out to some cities around the world, and she mentioned how she really never even dreamed of a possibility of being in such places. On the other hand, when you grow in a world of technically unlimited possibilities, you have more dreams.
Sorry for rambling, but in my opinion, this somewhat affects economics of the new generation as well. Who cares of long term gains if there’s a chance of nobody experiencing the gain, might as well risk it for the short term one for a possibility of some reward.
You need to also have a robust alternative that grows quickly in the cleared space. In 2008 we got a correction that cleared the incumbents, but the ensuing decade of policy choices basically just allowed the thing to re-grow in a new form.
Yeah that's a more accurate framing, basically just saying that in '08 we put out the fire and rehabbed the old growth rather than seeding the fresh ground.
> Tesla and Bitcoin are ghosts of the timeline where those two sectors had to rebuild themselves from scratch
I disagree, I think they're artifacts of the rehab environment (the ZIRP policy sphere). I think in a world where we fully ate the loss of '08 and started in a new direction you might get Tesla, but definitely not TSLA, and the version we got is really (Tesla+TSLA) IMO. Bitcoin to me is even less of a break with the pre-08 world; blockchain is cool tech but Bitcoin looks very much "Financial Derivatives, Online". I think an honest correction to '08 would have been far more of a focus on "hard tech and value finance", rather than inventing new financial instruments even further distanced from the value-generation chain.
> Goldman Sachs and GM et al. should not currently exist.
Hard agree here
I thought in 2008 we told the incumbents "you are the most important component of our economy. We will allow everybody to go down the drain but you. That's because you caused the problem, so you are the only ones to guide us out of it"
It’s obvious to me that all of OpenAIs announcements about partnerships and spending is gearing up for this. But I do wonder how Altman retains the momentum through to next year. What’s the next big thing? A rocket company?
Hmm, there were news about Sam Altman wanting to buy/invest on a rocket company. [0]
[0] https://www.wsj.com/tech/ai/sam-altman-has-explored-deal-to-...
I'm not hoping for a market correction personally, I'm hoping that mobs reinvent the guillotine
They deserve nothing less by now. If they get away with nothing worse than "a correction" then they have still made out like bandits
What would be the effect? Ironically, more productive?
I am pissed at Microsoft now because my family plan for Office365 is set to renew and they are tagging on a surcharge of $30 for AI services I don’t want. What assholes: that should be a voluntary add on.
EDIT: I tried to cancel my Office365 plan, and they let me switch to a non-AI plan for the old price. I don’t hate them anymore.
I think you’re over-estimating the capabilities of these tech leaders, especially when the whole industry is repeating the same thing. At that point, it takes a lot of guts to say “No, we’re not going to buy into the hype, we’re going to wait and see” because it’s simply a matter of corporate politics: if AI fails to deliver, it fails to deliver for everyone and the people that bought into the hype can blame the consultants / whatever.
If, however, AI ended up delivering and they missed the boat, they’re going to be held accountable.
It’s much less risky to just follow industry trends. It takes a lot of technical knowledge, gut, and confidence in your own judgement to push back against an industry-wide trend at that level.
If it works 99% of the time, then a demo of 10 runs is 90% likely to succeed. Even if it fails, as long as it's not spectacular, you can just say "yeah, but it's getting better every day!", and "you'll still have the best 10% of your human workers in the loop".
When you go to deploy it, 99% is just not good enough. The actual users will be much more noisy than the demo executives and internal testers.
When you have a call center with 100 people taking 100 calls per day, replacing those 10,000 calls with 99% accurate AI means you have to clean up after 100 bad calls per day. Some percentage of those are going to be really terrible, like the AI did reputational damage or made expensive legally binding promises. Humans will make mistakes, but they aren't going to give away the farm or say that InsuranceCo believes it's cheaper if you die. And your 99% accurate-in-a-lab AI isn't 99% accurate in the field with someone with a heavy accent on a bad connection.
So I think that the parties all "want to believe", and to an untrained eye, AI seems "good enough" or especially "good enough for the first tier".
I think the line of thought in this thread is broadly correct. The most value I’ve seen in AI is problems where the cost of being wrong is low and it’s easy to verify the output.
I wonder if anyone is taking good measurements on how frequently an LLM is able to do things like route calls in a call center. My personal experience is not good and I would be surprised if they had 90% accuracy.
Sort of a repost on my part, but the LLM's are all really good at marketing and other similar things that fool CEO's and executives. So they think it must be great at everything.
I think that's what is happening here.
Understatement of the year. At this point, if AI fails to deliver, the US economy is going to crash. That would not be the case if executives hadn't bought in so hard earlier on.
Nice cul-de-sac our techbro leaders have navigated us into.
My country has had bad economy and high unemployment for years, even though rest of the world is doing mostly OK. I'm scared to think what will happen once AI bubble either bursts or eats most white collar jobs left here.
At this point I think it might actually be both rather than just one or the other.
This discourse needs to die. Incompetence + lack of empathy is malice. Even competence in the scenario they want to create is malice. It's time to stop sugar-coating it.
Convention here is that AI is the next sliced bread. And big-tech managers care about their reputation.
Isn't that the whole mythos of these corporate leaders though? They are the ones with the vision and guts to cut against the fold and stand out among the crowd?
I mean it's obviously bullshit, but you would think at least a couple of them actually would do something to distinguish themselves. They all want to be Steve Jobs but none of them have the guts to even try to be visionary. It is honestly pathetic
The discussion we should be having is how we can come together to remove people from power and minimize the influence they have on society.
We don't have the carbon budget to let billionaires who conspires from island fortresses in Hawaii do this kind of reckless stuff.
It's so dismaying to see these industries muster the capital and political resources to make these kinds of infrastructure projects a reality when they've done nothing comparable w.r.t to climate change.
It tells me that the issue around the climate has always been a lack of will not ability.
Pure greed would have a strong incentive to understand what the market is actually demanding in order to maximize profits.
These attempts to try to steer demand despite clear indicators that it doesn't want to go in that direction aren't just driven by greed, they're driven by abject incompetence.
This isn't pure greed, it's stupid greed.
Not necessarily, just look at this clip [1] from Margin Call, an excellent movie on the GFC. As Jeremy Irons is saying in that clip, the market (as usually understood in classical economy, with producers making things for clients/customers to purchase) is of no importance to today's market economy, almost all that matters, at the hundreds of billions - multi-trillion dollars-levels, is for your company "to play the music" as best as the other (necessarily very big) market participants, "nothing more, nothing less" (again, to quote Irons in that movie).
There's nothing in it about "making what people/customers want" and all that, which is regarded as accessory, that is if it is taken into consideration at all. As another poster is mentioning in this thread, this is all the direct result of the financialization of much of the Western economy, this is how things work at this level, given these (financiliazed) inputs.
Also, if the current level of AI investment and valuations aren't justified by market demand (I believe so), many of these people/companies are getting more money than they would without the unreasonable hype.
If the kind of foresight and consideration you suggest were possible, companies wouldn't be on this self-cannibalizing path of exploiting customers right now for every red cent you can squeeze out of them. Long term thinking would very clearly tell you that abusing your customers and burning all the goodwill the company built over a hundred years is idiotic beyond comparison. If you think about anything at all other than tomorrow's bottom line you'd realize that the single best way to make a stable long-term business is to treat your customers with respect and build trust and loyalty.
But this behavior is completely absent in today's economy. Past and future don't matter. Getting more money right now is the only thing they're capable of seeing.
How would they? They are a monopoly, and partake in aggressive product bundling and price manipulation tactics. They juice their user numbers by enabling things in enterprise tenants by default.
If a product of theirs doesn't sell, they bundle it for "free" in the next tier up of license to drive adoption and upgrades. Case in point, the InTune suite (includes EntraID P2, Remote assistance, endpoint privilege management) will now be included in E5, and the price of E5 is going up (by $10/user/month, less than the now bundled features cost when bought separately). People didn't buy it otherwise, so now there's an incentive to move customers off E3 and into E5.
Now their customers are in a place where Microsoft can check boxes, even if the products aren't good, so there's little incentive to switch.
Try to price out Google Workspace (and also, an office license still because someone will need Excel), Identity, EDR, MDM for Windows, mac, mobile, slack, VoIP, DLP, etc. You won't come close to Microsoft's bundled pricing by piecing together the whole M365 stack yourself.
So yeah, they escape market discipline because they are the only choice. Their customers are fully captive.
Shipping some ads in windows? Doesn't really hurt you, it makes you extra money. Sure, some customers get a little annoyed, but who cares.
But this time they invested huge amounts of money to chase something that will likely never get profitable and return enough to pay off.
As time goes by, I'm starting to think they may be right more than they're wrong.
And this is a sad and depressing statement about humanity.
In the past this wasn't such a big deal because businesses weren't so large or so frequently run by myopic sociopaths. Ebenezer Scrooge was running some small local business, not a globe spanning empire entangling itself with government and then imposing itself on everybody and everything.
Subpar companies selling subpar products can be massively successive, because they know their customers.
Meanwhile, pretty much every single person in my life is using LLMs almost daily.
Guys, these things are not going away, and people will pay more money to use them in future.
Even my mom asks ChatGPT to make a baking applet with a picture she uploads of the recipe, that creates a simple checklist for adding ingredients (she forgets ingredients pretty often). She loves it.
This is where LLMs shine for regular people. She doesn't need it to create a 500k LOC turn-key baking tracking SaaS AWS back-end 5 million recipes on tap kitchen assistant app.
She just needs a bespoke one off check list.
500,000,000 people paying $80/mo is roughly a 5-yr ROI on a $2T investment.
I cannot believe on a tech forum I need to explain the "Get them hooked on the product, then jack up the price" business model that probably 40% of people here are kept employed with.
Right now they are (very successfully) getting everyone dependent on LLMs. They will pull rug, and people will pay to get it back. And none of the labs care if 2% of people use local/chinese models.
False. Training happens once for a time period, but inference happens again and again every time users use the product. Inference is the main money sink.
"according to a report from Google, inference now accounts for nearly 60% of total energy use in their AI workloads. Meta revealed something even more striking: within their AI infrastructure, power is distributed in a 10:20:70 ratio among experimentation, training, and inference respectively, with inference taking the lion’s share."
https://blogs.dal.ca/openthink/the-hidden-cost-of-ai-convers...
Also, everyone here conveniently always forgets the huge hardware and datacenter upfront investment that MS have already made. That cost alone will never be recouped with current prices.
If you can't even run the thing close to profitable, then how will you ever actually profit?
But don't worry guys, your robotaxi will recoup your tesla purchase within a year while you sleep.
Simply not going to happen
Or better yet, you just need 100 people paying 400 million each to get the same amount!
> "Get them hooked on the product, then jack up the price"
That only works if the product is actually good. The average person isn't going to be paying EIGHTY dollars a month to generate recipes or whatever, that's just delusional
I dislike almost every AI feature in software I use but love using LLMs.
For reference, AirHelp alone had revenue of $153M last year (even without my money ;-P): https://rocketreach.co/airhelp-profile_b5e8e078f42e8140
This single niche industry as a whole is probably worth billions alone.
Now multiply that by the number of niches that exist in this world.
The consider the entire universe of formal knowledge work, where large studies (from self-reported national surveys to empirical randomized controlled trials on real-world tasks) have already shown significant productivity boosts, in the range of 30%. Now consider their salaries, and how much companies would be willing to pay to make their employees more productive.
Trillions is not an exaggeration.
But "a slightly better search engine" sounds much less interesting to investors than "will completely transform human civilization" ;)
As you admit, it can't do that. And everyone involved knows it.
How is that anything other than a con?
Quite the strawman. There are many points between “worthless” and “worth 100s of billions to trillions of investment”.
Probably individual actors have different motivations, but let's spitball for a second:
- LLMs are genuinely a revolution in natural language processing. We can do things now in that space that were unthinkable single-digit years ago. This opens new opportunity spaces to colonize, and some might turn out quite profitable. Ergo, land rush.
- Even if the new spaces are not that much of a value leap intrinsically, some may still end up obsoleting earlier-generation products pretty much overnight, and no one wants to be the next Nokia. Ergo, defensive land rush.
- There's a non-zero chance that someone somewhere will actually manage to build the tech up into something close enough to AGI to serve, which in essence means deprecating the labor class. The benefits (to that specific someone, anyway...) would be staggering enough to make that a goal worth pursuing even if the odds of reaching it are unclear and arguably quite low.
- The increasingly leveraged debt that's funding the land rush's capex needs to be paid off somehow and I'll venture everyone knows that the winners will possibly be able to, but not everyone will be a winner. In that scenario, you really don't want to be a non-winner. It's kind of like that joke where you don't need to outrun the lions, you only need to outrun the other runners, except in this case the harder everyone runs and the bigger the lions become. (Which is a funny thought now, sure, but the feasting, when it comes, will be a bloodbath.)
- A few, I'll daresay, have perhaps been huffing each other's farts too deep and too long and genuinely believe the words of ebullient enthusiasm coming out of their own mouths. That, and/or they think everyone's job except theirs is simple actually, and therefore just this close to being replaceable (which is a distinct flavor of fart, although coming from largely the same sources).
So basically the mania is for the most part a natural consequence of what's going on in the overlap of the tech itself and the incentive structure within which it exists, although this might be a good point to remember that cancer and earthquakes too are natural. Either way, take care of yourselves and each other, y'all, because the ride is only going to get bouncier for a while.
Bullshit
CEOs have been sold on the ludicrous idea that "AI" will replace 60-80% of their total employee headcount over the next 2-3 years. This is also priced into current equity valuations.
When I first started consulting, organizations were afraid enough of lack of ROI in tech implementations that projects needed an economic justification in order to be approved.
Starting with cloud, leadership seemed so become rare, and everything was "us too!".
After cloud it was data/data visualization, then it was over-hiring during Covid, the it was RTO, and now it's AI.
I wonder if we will ever return to rationalization? The bellwether might be Tesla stock price (at a rational valuation).
The cost of missing that opportunity is why they're heavily investing in AI, they don't want to miss the boat if there's going to be one.
And what else would they do? What's the other growth path?
Are you arguing that if LLMs didn’t exist as a technology, they wouldn’t find anything to do and collapse?
There are three types of humans: mimics, amplifiers, originators. ~99% of the population are basic mimics, and they're always terrified - to one degree or another - of being out of step with the herd. The hyper mimicry behavior can be seen everywhere and at all times, from classrooms to Tiktok & Reddit to shopping behaviors. Most corporate leadership are highly effective mimics, very few are originators. They desperately herd follow ('nobody ever got fired for buying IBM').
This is the dotcom equivalent of every business must be e and @ ified (the advertising was aggressively targeted to that at the time). 1998-2000, you must be e ready. Your hotdog stand must have its own web site.
It is not greed-driven, it's fear-driven.
> I think the best fit explanation is simple con artistry.
Yes, perhaps, but many industries are built on a little bit of technology and a lot of stories.
I think of it as us all being caught in one giant infomercial.
Meanwhile as long as investors buy the hype it's a great story to use for triming payrolls.
It's the opposite; it's FOMO.
No company or government in the EU should use this spyware.
Everything about the conversation felt like talking to a true believer, and there's plenty out there.
It's the hopes and dreams of the Next Big Thing after blockchain and web3 fell apart and everyone is desperate to jump on the bandwagon because ZIRP is gone and everyone who is risk averse will only bet on what everyone else is betting on.
Thus, the cycle feeds itself until the bubble pops.
1) We have barely scratched the surface of what is possible to do with existing AI technology. 2) Almost all of the money we are spending on AI now is ineffectual and wasted.
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If you go back to the late 1990s, that is the state that most companies were at with _computers_. Huge, wasteful projects that didn't improve productivity at all. It took 10 years of false starts sometimes to really get traction.
I think that. It's new technology and it always takes some years before all the implications and applications of new technology are fully worked out. I also think that we're in a bubble that will hose a lot of people when it pops.
*Think toll booths (“exact change only!”) replaced by automated license plate readers in just the span of a decade. Hardly noticeable now.
(Vista wasn't the only one; Windows ME never even made it to semi-usable, and no-one even remembers that Windows 8 _existed_.)
Microsoft has _never_, as far as I know, been a company to be particularly concerned about product quality. The copilot stuff may be unusually bad, but it's not that aberrant for MS.
After the mobile and cloud revolution having run out of steam, AI is what promises most growth by far, even if it is a dubious promise.
It’s a gamble, a bet on “the next big thing”. Because they would never be satisfied with there not being another “big thing”, or not being prominently part of it.
Ok, but that isn't useful to me. If I have to hold the bot's hand to get stuff done, I'll just do it myself, which will be both faster and higher quality.
At this point, I consider these AI tools to be an invaluable asset to my work in the same way that search engines are. It’s integrated into my work. But it takes practice on how to use it correctly.
It's because I've used it and it doesn't come even close to delivering the value that its advocates claim it does. Nothing mysterious about it.
Alternatively, you are referring to the latter group and, uh, sorry.
1. AI does things we can already do but cheaper and worse.
This is the current state of affairs. Things are mostly the same except for the flood of slop driving out quality. My life is moderately worse.
2. Total victory of capital over labor.
This is what the proponents are aiming for. It's disastrous for the >99% of the population who will become economically useless. I can't imagine any kind of universal basic income when the masses can instead be conveniently disposed of with automated killer drones or whatever else the victors come up with.
3. Extinction of all biological life.
This is what happens if the proponents succeed better than they anticipated. If recursively self-improving ASI pans out then nobody stands a chance. There are very few goals an ASI can have that aren't better accomplished with everybody dead.
Even if they want to do it for no reason, they'll still be happier if their friends and family are alive and happy, which recurses about 6 times before everybody on the planet is alive and happy.
Those are the four use cases featured by the Microsoft 365 Copilot App (https://m365.cloud.microsoft/).
Conversely, I bet there are a lot of people who want AI to improve things they are already doing repeatedly. For example, I click the same button in Epic every day because Epic can't remove a tab. Maybe Copilot could learn that I do this and just...do it for me? Like, Copilot could watch my daily habits and offer automation for recurring things.
I agree, an assistant would be fantastic in my life, but LLMs aren't AGI. They can not reason about my intentions, don't ask clarifing questions (bring back ELIZA), and handle state in an interesting way (are there designs out there that automatically prune/compress context?).
You could solve that issue (and probably lot's of similar issues) with something like Auto Hotkey. Seems like extreme overkill to have an autonomous agent watch everything you do, so it might possibly click a button.
I've done similar things.
Meanwhile I spent 3-4 hours working with a client yesterday using Dreamhost’s free AI tools to get them up and running with a website quickly whilst I configured Microsoft 365, Cloudflare, email and so forth for them.
We're working on it at https://github.com/openadaptai/openadapt.
Pretty sure the advertising department already watches you and helpfully suggests things that you need to buy.
I said "improve", not "write". As in pre-LLM days you'd give what you wrote to someone else to review and give feedback.
> Microsoft denies report of lowering targets for AI software sales growth
This Ars Technica article cites the same reporting as that Reuters piece but doesn't (yet) include anything about MSFT's rebuttal.
"AI everywhere" is worse than "AI nowhere". What we need is "AI somewhere".
It's great for prototypes reactors, sometimes debugging (I'm kinda annoyed at how googling seems less and less efficient nowadays), and also reviewing.
But you gotta be critical about it. It's like a junior assistant eager to show work - you shouldnt take it and deliver it as is, it needs to be filtered by a competent person with taste!
No wonder there is this exhaustion.
Meanwhile, they believed the market was already theirs—so their logic became: fire the engineers, buy more GPUs.
I have mixed feelings about this. I've interviewed several people who were affected by these layoffs, and honestly, many of them were mediocre engineers by most measures. But that still doesn't make this a path to success.
How mediocre are we talking about here? (I’m curious)
You can find secret little pockets within Microsoft where individuals & small teams do nothing at all, day in and day out. I mean literally nothing. The game is to maximize life and minimize work at the expense of the company. The managers are in on the game and help with the cover-up. I find it hilariously awesome and kind of sad at the same time.
Anyway, one round of layoffs this year was specifically targeted at finding these pockets and snuffing them out. The evidence used to identify said pocket was slowly built out over a year ahead of time. It's very likely that these pockets also harbored poor & mediocre developers, it stands to reason that a poor or mediocre developer is more likely to gravitate to such a place.
Not saying all the developers that were laid off were in a free-loader pocket, or that this cohort must be the ones that were interviewed. I'm only suggesting that the mediocre freeloaders form a significant slice of the Venn diagram.
I'm sure it's difficult enough for people to find work right now without you putting a knife in their back on the way out.
Is this “they’re not Carmack”? “They messed up their explanation or the CAP theorem”? “They can’t write a for loop”?
The kind of code AI writes is the kind of code Microsoft has always written.
> At the heart of the problem is the tendency for AI language models to confabulate, which means they may confidently generate a false output that is stated as being factual.
"Confabulate" is precisely the correct term; I don't know how we ended up settling on "hallucinate".
>production of fabricated, distorted, or misinterpreted memories
doesn't fit. LLMs don't produce distorted memories, they guess random stuff and then forget it shortly after.
I think 'guess' may be more accurate.
Uh, TIL. This is wildly different to the Spanish meaning, confabular means to plot something bad (as in a conspiracy).
Which is a weird evolution in both languages, as the Latin root seems to mean simply “talking together”.
If Clippy were still around, that'd have been rebranded as Copilot by now.
There’s definitely something there with AI but a giant chasm between reality and the sales expectations on what’s needed to make the current financial engineering on AI make any sense.
Although that depends on total revenues too (low margin on high revenue can be better than high margin on low revenue).
Well.. that's certainly one way to view it. The other is:
"because the company set unrealistic expectations."
I'm sure this will slow down the growth of "AI datacenters." I'm sure of this.
What could possibly go wrong
Is it just for chatting? Is it a glorified RAG?
Can you tell copilot co to create a presentation? Make a visualisation in a spreadsheet?
It is functional at RAG stuff on internal docs but definitely not good - not sure how much of this is Copilot vs corporate disarray and access controls.
It won't send emails for me (which I would think is the agentic mvp) but that is likely a switch my organization daren't turn on.
Tldr it's valuable as a normal LLM, very limited as a add-on to Microsoft's software ecosystem.
Biggest complaint for me personally is that you run out of context very quickly. If you are used to having longer running chats on other platforms you won't be happy when Copilot tells you to make a new chat like 5 messages in.
For most of my clients they are only interested in meeting minutes and otter does that for 25% of the price. I think in any given business the qty of people who actually use textgen regularly is pretty low. My workplace is looking to downsize licenses and asking people to use it or lose it because $21/user/mo is too much to have as a every now and then novelty.
And MS spends on buying AI hardware. That's a full circle.
Can't Microsoft supercharge its workflow with these five weird prompts that bring a new layer of intelligence to its productivity:
https://fortune.com/2025/09/02/billionaire-microsoft-ceo-sat...
Apple's having a similar issue, unlimited wealth that's outsourcing to external SOTA model providers.
I also have a PhD in CS/ML, work with a healthcare AI company, and am building my own agentic setup
My point is, outside of co-pilot, very few consider Microsoft when they are looking for AI solutions, and if you're not already using Azure, why would you even bother check what they offer. At this point, their biggest ticket is their OpenAI stake.
With that being said, I should give them some credit. They do some interesting research and have some useful open source libraries they release and maintain in the AI space. But that's very different than building AI products and solutions for customers.
I think tons of businesses look to Microsoft first when it comes to AI solutions. I'm not saying they have the best products, but when has that ever stopped them?
Not true. They're clearly unwilling or unable to remove this code path fully, or they would have done so by now. There's just a different workaround for it every few years.
Separately, the theme from talking to Every. Single. Person on the buy-side was gigantic eye roll yes I cant wait for AI to solve all my problems.
Companies I support are being directed from their presidents to use ai, literally a solution in search of a problem.
Not only that but the headline and story changed by the time Ars went to print:
Microsoft denies report of lowering targets for AI software sales growth
But the one thing they're really good at is marketing.
That's why it's all over linkedin etc, marketing people see how great it is and think it must be great at everything else too.
Microsoft had a great start with the exclusive rights over OpenAI tech but they're not capable of really talking with developers within those large companies in the same sense Google and AWS are rapidly catching-up.
Would be good if a sales person chime could in to keep me honest, but:
1. There is a difference between sales quotas and sales growth targets. The former is a goal, latter is aspirational, a "stretch goal". They were not hitting their stretch goals.
2. The stretch goals were, like, doubling the sales in a year. And they dropped it to 25% or 50% growth. No idea what the adoption of such a product should be, but doubling sounds pretty ambitious? I really can't say, and neither did TFA.
3. Only a fraction met their growth goals, but I guess it's safe to assume most hit their sales quotas, otherwise that's what the story would be about. Also, this implies some DID hit their growth goals, which implies at least some doubled their sales in a year. Could be they started small so doubling was easy, or could be a big deal, we don't know.
4. Sales quotas get revised all the time, especially for new products. Apparently, this was for a single product, Foundry, which was launched a year ago, so I expect some trial and error to figure out the real demand.
5. From the reporting it seems Foundry is having problems connecting to internal data sources... indicating it's a problem with engineering, and not a problem with the AI itself. But TFA focuses on AI issues like hallucinations.
6. No reporting on the dozens of other AI products that MSFT has churned out.
As an aside, it seems data connectivity issues are a stickier problem than most realize (e.g. organizational issues) and I believe Palantir created the FDE role for just this purpose: https://nabeelqu.substack.com/p/reflections-on-palantir
Maybe without that strategy it would be hard for a product like this to work.
Not saying that sales is useless, far from it. But with an established product that people know about, the sales team is more of a conduit than they are a resource-gathering operation.
Why do people use this useless phrase template?
Yeah, the point is that it's not selling, and it's not selling because people are getting increasingly skeptical about its actual value.
So why are the sales-peops being blamed?
If your organization is filled with the $4k type and not the $25k type, you're going to have a bad time.
I was #7 in the US while working at a small dealership. I moved the the large dealership mentioned above and instantly that dealership became #1 for that brand in the country, something they had never done before. Because not only did I sell 34 cars a month without just cannibalizing others sales, I showed others that you can show up one day and do well so there weren't many excuses. The output of the entire place went up.
So, depending on the pay plan and hiring process, who exactly is working at Microsoft right now selling AI? I honestly have no idea. It could be rock stars and it could be the $4k guys happy they're making $10k at Microsoft.
Think about it: MS has a giant advantage over every other AI vendor, that they can directly insert the product into the OS and LOB apps without the business needing to onboard a new vendor. This is best case scenario, and by far the easiest sell for these tools. Given how badly they're failing, yeah, turns out orgs just don't see the value in it.
Next year will be interesting too: I suspect a large portion of the meager sales they managed to make will not renew, it'll be a bloodbath.
Considering enterprise typically is characterized by perfunctory tasks, information silos, and bit rot, they're a perfect application of LLMs. It's just Microsoft kind of sucks at a lot of things.
25% up :-D
It has all the same components, just on much higher scale:
1. Billionaire con-man convincing large part of market and industry (Altman in AI vs Musk in EV) that new tech will take over in few years.
2. Insane valuations not supported by an actual ROI.
3. Very interesting and amazing underlying technology.
4. Governments jumping on the hype and enabling it.