Microsoft drops AI sales targets in half after salespeople miss their quotas

The sales figures suggest enterprises aren’t yet willing to pay premium prices for these AI agent tools. And Microsoft’s Copilot itself has faced a brand preference challenge: Earlier this year, Bloomberg reported that Microsoft salespeople were having trouble selling Copilot to enterprises because many employees prefer ChatGPT instead. The drugmaker Amgen reportedly bought Copilot software for 20,000 staffers, but many employees gravitated toward OpenAI’s chatbot instead, with Copilot mainly used for Microsoft-specific tasks like Outlook and Teams.

A Microsoft spokesperson declined to comment on the changes in sales quotas when asked by The Information. But behind these withering sales figures may lie a deeper, more fundamental issue: AI agent technology likely isn’t ready for the kind of high-stakes autonomous business work Microsoft is promising.

The gap between promise and reality

The concepts behind agentic AI systems emerged shortly after the release of OpenAI’s GPT-4 in 2023. They typically involve spinning off “worker tasks” to AI models running in parallel with a supervising AI model, and incorporate techniques to evaluate and act on their own results. Over the past few years, companies like Anthropic, Google, and OpenAI have refined those early approaches into far more useful products for tasks like software development, but they are still prone to errors.

At the heart of the problem is the tendency for AI language models to confabulate, which means they may confidently generate a false output that is stated as being factual. While confabulation issues have reduced over time with more recent AI models, as we’ve seen through recent studies, the simulated reasoning techniques behind the current slate of agentic AI assistants on the market can still make catastrophic mistakes and run with them, making them unreliable for the kinds of hands-off autonomous work companies like Microsoft are promising.