Microsoft is facing an uncomfortable reality in the AI race: many users simply aren’t embracing its AI products. While Google’s Gemini continues to gain momentum, Microsoft’s Copilot ecosystem appears to be struggling to generate real demand.
According to a recent report by The Information, Microsoft has scaled back internal sales targets for several AI products after sales teams failed to meet expectations. In some cases, targets were reportedly cut by as much as 50 per cent. Microsoft has pushed back on the report, but broader market trends suggest something isn’t working as planned.
Despite being an early AI leader through its close partnership with OpenAI, Microsoft’s momentum has slowed. Copilot, now embedded across Windows, Microsoft 365, and other services, has yet to become a must-have tool for most users. By contrast, Google’s Gemini is growing rapidly, fueled by deeper integration into Android, Google Workspace, and search.
Market data highlights the shift. ChatGPT still dominates AI usage, but Google Gemini is closing the gap with Microsoft Copilot at a much faster pace. Recent figures show Gemini’s quarterly user growth far outpacing Copilot’s, suggesting Google may soon overtake Microsoft for second place in AI adoption.
One issue appears to be reliability. Independent testing has shown that so-called “agentic” AI tools often fail to complete tasks correctly, requiring frequent human intervention. That limits their usefulness as productivity boosters and makes it harder to justify their cost in business settings.
There’s also a growing perception problem. Many of Microsoft’s AI features feel rushed, uneven, or unfinished. Basic tasks that users expect AI to handle smoothly, scheduling meetings, managing documents, or editing photos,often work better in Google’s ecosystem than in Microsoft’s.
Google, meanwhile, benefits from tighter control of its technology stack. From custom AI chips to Android devices and cloud infrastructure, it can fine-tune how AI features are delivered. Microsoft still relies heavily on third-party hardware and OpenAI’s models, which limits flexibility and increases costs.
That doesn’t mean Microsoft’s AI efforts are failing across the board. GitHub Copilot has been widely praised, and the company is investing in its own AI chips and models to reduce long-term dependence on partners. But success remains uneven.
For now, the gap between promise and performance is becoming harder to ignore. Microsoft moved fast to ship AI everywhere, but speed alone doesn’t guarantee adoption. As Google’s Gemini improves and gains users, Microsoft may need to slow down, refocus, and prioritize quality, or risk watching the AI race slip further out of reach.
