**Microsoft Stock Declines Amid AI Concerns**
On Thursday, Microsoft (NASDAQ: MSFT) experienced a significant drop in stock value following its quarterly report, raising investor worries about its reliance on AI. Nearly 45% of Microsoft’s remaining performance obligation, amounting to $281 billion, is linked to contracts with OpenAI, heightening risks for the tech giant, especially as its own AI products face poor adoption rates. Microsoft reported $37.5 billion in capital expenditures this past quarter, with two-thirds allocated to short-lived GPU and CPU assets.
Despite Microsoft’s acquisition of 15 million paid subscribers for its 365 Copilot AI tool, this represents only about 3% of the 450 million available paid seats. Additionally, GitHub Copilot boasts only 4.7 million paid subscribers out of 150 million users. As both user adoption and ongoing investments in AI lag, concerns are mounting about the sustainability of Microsoft’s heavy financial commitments in this sector and the potential ramifications on its overall business performance.
