Is The AI Model Really The Most Important Part?
Part 2 of 3 on Microsoft and AI. Start with part 1: How Microsoft Missed $2 Trillion In AI.
Open Outlook in the morning. The AI that summarizes your inbox might be OpenAI’s, or Anthropic’s, or Microsoft’s own. You don’t care, and neither does your IT department’s bill: it goes to Microsoft either way. That’s the case for Microsoft in one sentence. It doesn’t need the best model if it owns the place where you use one.
The case against is just as simple. If the model does the real work, writing the deck, building the spreadsheet, answering the email, then whoever owns it can raise the price, and Microsoft becomes a middleman paying a supplier.
Either way, you probably own both sides: the landlord in Microsoft, the model makers through Google and Amazon. In a portfolio of a few million dollars, which side is bigger? A Trefis partner firm can show you in a free 15-minute call.
What Does Microsoft Still Own?
- The customer. More than 90% of the Fortune 500 use its Copilot assistant, by Microsoft’s count.
- The cloud. Azure grew 48% last quarter. Anthropic, the rival model maker, committed $30 billion to Microsoft’s cloud.
- A stake. About 24% of OpenAI.
What’s The Warning Sign?
Microsoft reported more than 30 million paid Copilot seats in July. In October it gave no seat count at all, only that daily users rose nearly 50% in a quarter. Thirty million is still a small share of the hundreds of millions of people who use Microsoft’s office software at work. When a company stops reporting a number, investors should ask why.
The model matters, but so does the bill. Microsoft wins if companies keep paying it for AI they could buy elsewhere. Watch the Copilot seat count and Azure growth in Microsoft’s next report.
What Should You Ask Next?
If you have $1 million or more invested, get a second opinion on your AI exposure in a free 15-minute call with a Trefis partner firm.
For questions about this article or underlying research, email help@trefis.com.