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Distribution and use of this material are governed by our Subscriber Agreement and by copyright law. For non-personal use or to order multiple copies, please contact Dow Jones Reprints at 1-800-843-0008 or visit www.djreprints.com. https://www.wsj.com/tech/ai/ microsofts-pivotal-ai-product-is-running-into-big-problems-ce235b28 1. Technology ----------------------------------------------------------------- 2. Artificial Intelligence Microsoft's Pivotal AI Product Is Running Into Big Problems After leaning on its partnership with OpenAI, Microsoft is playing catch-up in the chatbot race. But data shows that it is losing ground with users. Share Resize --------------------------------------------------------------------- Listen (2 min) Microsoft CEO Satya Nadella holds the Copilot logo.Microsoft CEO Satya Nadella Emil Lendof/WSJ, Getty Images By Sebastian Herrera Microsoft's MSFT 0.72%increase; green up pointing triangle Copilot chatbot has become central to its artificial-intelligence strategy as the company's close partnership with OpenAI diminishes. But the effort to build it up as a ChatGPT alternative has been tough going. Confusing brand positioning and interoperability problems have frustrated users, current and former employees who have worked on Microsoft's AI products said. Only a small proportion of subscribers to Microsoft's enterprise suite use Copilot, and the percentage who favor it over Google's Gemini or other tools has decreased in recent months, according to data reviewed by the Journal. The stakes are high for Microsoft because Copilot is core to a push by Chief Executive Satya Nadella to transform Microsoft into an AI-first company, much as he transformed it into a cloud-first company around a decade ago. Copilot is one of Nadella's top priorities, current and former executives said. Microsoft shares tumbled after its earnings report last week sparked investor concern that growth in its most important unit, the Azure cloud-computing business, is slowing, and that its AI business is reliant on OpenAI while Copilot remains unproven. Shares fell nearly 3% Tuesday amid a slide in software stocks prompted by fresh concerns that AI tools will make enterprise subscriptions less necessary. Copyright (c)2026 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8