shares slid after the Information reported that the software maker has lowered expectations for
to spend money on the cloud unit’s marketplace for
models and agents.
Several divisions at Microsoft have lowered quotas for how much salespeople are supposed to increase sales of certain AI products after many of them missed their targets in the fiscal year that ended in June, the Information reported, citing two salespeople in the
. The unusual shift reflects how Microsoft is compensating for companies’ resistance to pay more for AI, according to the report.
“The Information’s story inaccurately combines the concepts of growth and sales quotas,” a Microsoft spokesperson said in an emailed statement. “Aggregate sales quotas for AI products have not been lowered.” CNBC reported the company’s denial earlier.
The stock fell as much as three per cent
in New York on Wednesday, but pared the drop as analysts and investors digested the Information report.
In a research note, Jefferies wrote that the publication “completely missed the point in its article,” adding that its analysts had spoken with the company’s management. Jefferies said Microsoft urged investors to focus on accelerating remaining performance obligations, an indication of future revenue. The analysts also said their checks showed robust adoption of
Microsoft’s Copilot line of AI assistants
.
Microsoft and its
, including Alphabet Inc.’s Google, Meta Platforms Inc. and Amazon.com Inc., have been spending massively on chips, servers and other expenses related to building data centres to fuel the demand for AI computing. But there are signs that the market is growing skeptical that the costs are justified by an as-yet unproven technology. Some businesses have complained that it’s hard to measure savings made from using AI for routine tasks and note that the technology still makes mistakes that can be costly, the Information said.
One Microsoft sales unit had asked salespeople to increase customers’ spending on the company’s Foundry marketplace by 50 per cent in the last fiscal year, the Information said. But fewer than one-fifth of salespeople in that unit met their targets and in July Microsoft lowered the goal to about 25 per cent growth for the current fiscal year compared with the last, the Information reported.
for sales of AI models and tools to build and deploy automated AI agents. It’s distinct from the company’s Copilot-branded products, Microsoft’s main vehicle for selling AI tools to office workers. And much of the demand for Microsoft’s computing power for AI tasks has come directly from OpenAI, a relationship that’s separate from the Foundry model marketplace.