My biggest impressions from the article
Microsoft shares slid about 10% on Thursday following an earnings report that disappointed some investors, prompting the stock’s sharpest daily decline since March 2020.
Microsoft’s finance chief, Amy Hood, argued that the cloud result could have been higher if it had allocated more data center infrastructure to customers rather than prioritizing its in-house needs.
“If I had taken the GPUs that just came online in Q1 and Q2 in terms of GPUs and allocated them all to Azure, the KPI would have been over 40,” she said.
Analyst Ben Reitzes of Melius Research, with a buy rating on Microsoft stock, said during CNBC’s “Squawk on the Street” on Thursday that Microsoft should double down on data center construction.
“I think that there’s an execution issue here with Azure, where they need to literally stand up buildings a little faster,” he said.
LMAO, the analysts and C level execs are going to accelerate the fall of Micro$lop.
Could go down a lot further, a lot quicker when OpenAI Enrons. The whole tech space is a house of cards. Better to get out early and lose a little than be caught late and lose a lot.
Microsoft has really messed up quite spectacularly. 5 years ago I would never have even considered switching to another OS (especially for a daily driver).
Yet here I am, using LINUX! My experience with Linux has gone from the perception of it as a scary figure, a ghost looming around me that I was trying to ignore. But now, I’m realizing that Linux is more like Casper. Linux is a friendly ghost. So while I still may not know how to totally deal with cohabitating with a ghost, at least it’s friendly, in theory.
But in less obtuse terms: my experience with Linux has definitely had it’s terminal moments and learning to de-Windowsify my tasking, but it’s come to the point where the cons of Windows make it a non-starter.
Maybe it’s not the year of the Linux desktop, but the years of the Linux desktop. Reaching a wider audience and finding a way to make choosing a distro is going to be a task.
I will say that while I’ve never bought one of their systems, System76 is a company I regularly check up on because I think it’s very cool that they’re PC building from the ground up with Linux (and their own Linux distro as well). It’s a trend in the right direction, at least.
“If I had taken the GPUs that just came online in Q1 and Q2 in terms of GPUs and allocated them all to Azure, the KPI would have been over 40,” she said.
“If I had bet on black instead of red I would have won”
I think she’s saying she could have allocated the GPUs to Azure to game the metrics, but Microsoft chose to allocate them to internal projects, which is a form of self-investment. She’s not saying they made the wrong decision, she’s saying their decision in this longer-term investment makes the short-term metrics worse.
If ifs and butts were candy and nuts we’d all have a merry Christmas.
Oh no. Anyway…
Make Windows 7 again (or just use Linux), ditch AI, value your users. Sack the CEO. Pretty simple.
Or double down on AI. Then double down even harder.
- Make the use of Copilot mandatory; simultaneously heavily monetize it to instantly turn the AI division into a profit center.
- To that end release the successor to Windows 11, a cloud-only offering that replaces the taskbar with a Copilot instance which launches programs for the user. Downplay any accusations that the new Windows Live 365 With Copilot is just a rental Windows 11 with the taskbar hastily hacked out.
- Don’t forget that Windows Live 365 With Copilot does not include a subscription for Copilot, which must be booked separately.
- Get all of your customers to switch by immediately dropping support for all previous Windows versions, “migrating” their support windows over to Windows Live 365 With Copilot. Corporate customers, which have gone all-in on Azure, will need years to migrate off the Windows ecosystem, which means excellent short-term revenue.
- Make sure that Windows Live 365 With Copilot can only save to OneDrive to make it maximally hard for those customers to get their data out.
- Hope that the current world order disintegrates before the massive exodus of customers ruins the company.
- Whether or not it does, turn off your business phone and spend the next five years doing massive amounts of cocaine on a private island in the South Pacific.
A business plan to rally the crowds behind 💸
Solid business plan. Would implement
This would be great, but unfortunately would not make number go up. That is all they care about now.
I dunno. Windows 11 sales have been crap. People aren’t buying new machines due to it. Relaunch 12 as privacy focussed, AI enabled (but optional), and they could see a bounce. Double down on Office, keep a steady improvement on Azure, and see Xbox as a growth opportunity. Microsoft could avoid the AI slump
Notice how Apple have not jumped all in. They are anticipating the storm and are well prepared to weather it out
Apple did jump in but then backed out once it was clear their offering wasn’t even close to the competition. Remember their big push on Apple Intelligence and how most of the features they promised never materialised?
While the back-peddalling was embarrassing at the time, I agree that their cautious approach since will probably work out better than Microsoft going forward.
If I had to guess, at least in the past, Apple has typically listened to its engineers. Maybe not as well as like Valve.
If I had to guess, at least in the past, Apple has typically listened to its engineers.
Fair.
Windows 11 sales have been crap. People aren’t buying new machines due to it.
Wait until new computers quadruple in price because of data center demands, driven by idiotic AI initiatives nobody wants, and nobody buys new computers.
Windows & Xbox are like 16% of M$'s revenue, they’re not that important to the company.
Windows is a core driver of many of the other services. Linux certainly isn’t pushing OneDrive ads and Copilot ads like Windows is.
Hell, Microsoft doesn’t even make a OneDrive Linux GUI for some reason; their share on Linux is probably trash. The more people switch, the more those customers move to Dropbox and other services that actually make a product.
Exactly, both are under performing. New CEO should be fixing that
But they don’t give a shit about them, they cater to companies first and foremost.
Companies care about Windows for sure
They care that they’re running it.
Past that, they don’t care.
The reality is, and I say this with a heavy heart, that Crapple is ahead of everyone else in how to keep the money and stock prices moving in their favor. They ‘rent’ AI capabilities from OpenAI and Google and put their money where they always have, making new devices, some good developing and fucking over everyone in their walled garden. Microslop, on the other hand, has completely lost its north.
Full disclosure, I fucking hate Crapple almost as much as I hate Microslop, but they evidently know what they’re doing. How long they can keep their shit up is another conversation for another time.
Wtf is Office?
Oh, you must mean Microsoft Copilot App
They are running their own schemes as of right now.
Sorry you’re right, number MUST GO UP /s.
sigh.
Their core users are corporations, not personal households.
Depends on your definition of “users”. If “user” means “source of personal information to train AI models” then households absolutely are users. I guess we’re entering a world where different users do different things for a company like Microsoft: Corporations buy licenses for OS and software, households and individuals provide data to train the AI models that permeate it all.
I wonder how well a project to secure windows 7 and provide 3rd party security patches would do financially. Whichever country grows the balls to ignore the DMCA could do it and make a lot of people happy.
Very few people would use it. You’d have all the issues of Linux where very little is made for the OS, so community made ports would be the only way to get things running. Those downsides are counteracted by the upside of Windows… which is what?
DirectX I guess. I don’t know I haven’t owned a windows box since 2006 or so, and I found that one literally in someone’s trash. Still had their wedding photos on it and everything.
8 was better than 7.
No. 8.1 maybe. But not 8
Both because of Metro, unless there’s a back port to 7 there’s no reason to use 7.
I remember 8 being a cluster fuck. But 8.1 was ok.
I had a windows phone at the time. Those were great.
Do you mean that Windows Copilot AI Extra Spyware Edition wasn’t a smashing success, despite literally everyone who isn’t a buzzword-spouting CEO telling them this would happen for like a fucking year?
It’s actually insane how much money these companies have.
Ehhh…that’s their market capitalization, not their cash on hand.
The market capitalization is just what the company is worth, based on what investors are currently willing to pay for ownership of shares in the company.
EDIT: Here’s Microsoft’s cash on hand:
https://www.macrotrends.net/stocks/charts/MSFT/microsoft/cash-on-hand
Looks like about $100 billion.
Only $100 billion? That’s like nothing!
They can turn their market cap into liquid cash by borrowing against it. They can also pay directly in stock. E.g. how some pay their employees with more stock than salary. They can use their stock to buy other firms. The stock price and therefore market cap is not just an abstract number.
It’s not just an abstract number, but leveraging it changes the value. If they hypothetically tried to leverage 2 trillion with of their stock, it wouldn’t be worth 2 trillion.
Of course the needle would probably barely move if they tried to leverage 50 billion.
Exactly. They can’t get anything they want out of it but they can get a lot. Especially if it’s moving upwards.
Microsoft’s finance chief, Amy Hood, argued that the cloud result could have been higher if it had allocated more data center infrastructure to customers rather than prioritizing its in-house needs.
This is 98% chance a lie. Refusing azure clients wasn’t happening. They are saying the dedicated GPUs to copilot 365/windows/bing, but they would just slow tokens/second delivery or raise prices if they were constrained. Open AI/copilot service is flattening out is the far more likely explanation, and China/Anthropic/Google gaining share is apparent with frontend and LLM innovation.
That said, windows 11 copilot is going at about 7tps on simple queries about its QOS, and slow service of paid models could impact azure. In Nov 25, they did drop big customer volume discounts. There were big price increases earlier in the year, so growth was in part pricing growth, and likely a drop in usage volume from previous quarter, or at least very stable. The AI frenzy, mostly openAI/msft/oracle/coreweave block of absurdly impossible capacity growth depends on keeping up with supposedly massive (token) demand growth. There are still a lot of free alternatives in the space, and app download figures usually accompany free promotional usage of latest breakthrough model (sora2 was free use on release. kilo code this week has free Kimi K2.5. Other coding tools have fully free or generous free tiers)
Overall, this, and highly promotional industry, means its very hard for datacenter/LLMs to meet the hype. Deepseek 4 is hyped as a big leap forward, to be released in a couple of weeks. Everything AI boom is likely a lie, and Nvidia bribing Trump to sell H200s to China, at 25% export tariff, is proof of incapacity or unwillingness of US industry to deploy them.
Everything AI boom is likely a lie, and Nvidia bribing Trump to sell H200s to China, at 25% export tariff, is proof of incapacity or unwillingness of US industry to deploy them.
I’d love for you to be right (I’d like to see nvidia compete as an underdog since they are fairly anticompetitive in their dominant position) but think this reasoning is flawed.
Wanting to sell to China just means that demand isn’t exceeding supply, or maybe even that they have access to more supply that they’d use if they could sell to China, which is a massive market. Or even if they don’t have any excess supply, higher demand means they can set higher prices and still expect to sell all inventory.
Like the US car companies wanting to sell cars in China doesn’t imply that they are unable to sell cars in the US, it just means they want to sell cars to China and the US.
I agree with the rest of your comment and think it was well said, sorry about this nitpick.
Wanting to sell to China just means that demand isn’t exceeding supply, or maybe even that they have access to more supply that they’d use if they could sell to China, which is a massive market. Or even if they don’t have any excess supply, higher demand means they can set higher prices and still expect to sell all inventory.
Nvidia has to sell to a Chinese buyer for 25% more than a US buyer would pay to have equivalent profit. It’s certainly possible that China is willing to pay more than that difference, but US private sector is supposed to be in desperation mode for skynet, in addition to having direct white house access of lobbying against China for mere trinkets in tribute. MSFT and others have the power to tell whitehouse/other republicans that they want to buy the H200s instead, and amplify warmongering BS as the reason. They just don’t want to buy them.
Like the US car companies wanting to sell cars in China doesn’t imply that they are unable to sell cars in the US, it just means they want to sell cars to China and the US.
US car companies are not supply constrained, including some of them with factories in China, and aren’t prohibited from selling all of their cars there if they were competitive. Nvidia has not been making H200s recently. It has astronomical record inventory levels (likely H200s based on lobbying win). Thier H20 cards that they sold to China the last 2 years, are the best value inference cards on ebay from China, but Americans were not allowed to buy them directly. Since about half of Nvidia GPUs are assembled in China, they have 0 problem with black market access to them, and massive secret Singapore customers of Nvidia are likely them directly profiting from Chinese black market with payment to Nvidia instead of pilferage of GPUs. I get that B200s B300s are better value/FLOP than H200s, but H200s could be priced to Americans/colonies on the same/similar $/flop, and if US/MSFT was really supply constrained, they’d buy or lobby government to force Nvidia to sell them at good $/flop. The Nvidia corruption is also likely to create new H200 production making newer GPUs “scarcer”
I’m still on the fence as to whether their current CEO is just a complete business illiterate, or some kind of corporate Manchurian candidate… It’s sure LOOKS like malicious mismanagement to me, a nobody pleb.
I initially thought he was great. Their cloud business was booming, it looked like they were converging their tools, windows 10 had its flaws but was pretty good. But now the tools are an enormous mess because they have changed their minds 5 times over, Windows 11 is complete dogshit and all the tools that are actually handy are paywalled behind expensive licences. Copilot is being forcefed to unwilling users and every single one of their tools is becoming worse.
So yea, I think he’s a business illiterate because there is no strategy behind this mess.
The story I’ve heard is that he took a nosedive in effectiveness as CEO when his son died in 2022 (https://www.nbcnews.com/news/us-news/microsoft-ceo-satya-nadellas-son-dead-26-company-says-rcna18320). No idea how true that is, but 2022ish does seem to have been a turning point for Microsoft in terms of strategy and how well the company is run.
That’s sad. Regardless of whether it’s one of the reasons for Microsoft’s nosedive, it does make me feel some unexpected sympathy for Satya Nadella. I also feel pity, because most high up CEOs do not seem happy with their lives — Many of them spend an absurd amount of time at work, even if they never seem to actually do much work, and I can’t imagine how hard it must be to weather grief under such conditions. No amount of money can buy you more time with a lost loved one.
It really seems like a hollow existence.
Writing this from Linux which I installed last fall in lieu of the Windows 11 update.
I’m still using both OS via dual boot, and I still have some unresolved issues on Linux, but I will fully transition during the course of this year.
One thing that is really mind-blowing is the difference in performance on my ~7 y/o laptop. My Linux Mint is just lightning fast compared to Windows 10. You can quite literally feel how Windows runs a thousand random things in the background (most of which I never asked for) whereas Linux feels very clean and… empty, but in a good way.Something that I’m super chuffed with is that a few years back, one of my most cheapskate friends asked me for advice on buying a new laptop. When I presented their options to them, they were reluctant to cheap out and get a mediocre laptop that wouldn’t last them very long, but they also balked at the price of even the midrange laptops (they weren’t keen on spending more than £250 on a laptop, which wasn’t enough to get anything that they’d consider to be decent and worth the effort/cost).
As a long shot offer, I told them that I could always try installing Linux on their laptop if they wanted to wring another couple of years out of their existing laptop. I was a tad surprised when they opted for this, and even more surprised at how well they took to it; I jokingly call them one of my “normie” friends, because they’re one of the people whose perspective I ask for when I’m trying to calibrate for what non-techie people know/think. I only had limited experience with Linux myself at that point, having only played around with things on live USBs before. I had heard that Linux could give new life to slow computers, but I was surprised at just how effectively it did this.
(A small amusing aspect to this anecdote is that when I was installing it, I said that one of the side benefits of running Linux is that it could boost nerd cred amongst folk like me. They laughed and said that they didn’t expect that this would be a thing that would ever end up being relevant. Later that year, they got a girlfriend who saw that my friend was running Linux, and expressed approval, which is quite funny to me)
Nice! I love reading about people ditching winblows. next thing you’ll know, you’ll be distrohopping in no time. :)
Ain’t that the truth? I feel like Distro hopping is an integral part of falling in love with Linux. In my case, I get distro hopping zoomies every few months 🤣
Not sticking up for Microsoft, but when you first setup a Windows machine, all those metrics toggled on like advertising and keyboard or handwriting usage, etc, I turn all 6 of those off. One in Windows I now uninstall Copilot and disable stuff like phone link, OneDrive, and pretty much every application from running at startup ( Adobe if needed, etc)
This is just for work, but I can usually get away with lower spec machines by curating what’s allowed to run by default.
until they turn back on at the next update “by mistake”
Please die
Is that the bubble beginning to pop?
Naw, the valuation is still $3.22 trillion. The bigger tell will be the AI only companies start feeling the squeeze.
I dunno, the bit about dedicating more data center capacity to customers rather than in-house use seems to suggest that Microsoft are acknowledging that AI is a bubble that doesn’t provide any real value but they think the bubble still has some life left yet and they can make a buck selling compute to other
suckersvisionary investors.Seems like it’s down because investors think they didn’t spend enough on AI.
The same Melius Finance that gave Tesla stock its highest rating of “must own” due to Elon lying again that Full Self Drive is being deployed imminently to Teslas via their in-house “AI chips” eta Dec 2025?
https://finance.yahoo.com/video/tesla-stock-must-own-melius-220721932.html
Tesla stock is currently at $416 after a high of $474 in November, around when this call was made.
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$357 billion is between the total GDPs of Finland and Sri Lanka
Someone needs to engineer a virus that removes whatever defect humans have in their DNA that causes civilization-imperiling greed.
The problem is only a few humans with OCD that manifests as financial hoarding. They have more money than they or their descendants could ever spend, and yet they are driven to accumulate more, despite the obvious deleterious effects on society and the world.
If they were hoarding cats, or old newspapers, or rusty cars, etc., we’d step in, get them mental health help, and clean up the mess.
But since it’s money, we praise them for their success, and make it easier for them to indulge their mental illness even more. Sometimes we even GIVE them more money for free, just because it makes them so happy.
It’s time to stop indulging these lunatics. Take their businesses and fortunes away, we paid for most of it anyway, and put these maniacs in mental health facilities where they belong, at least until they have internalized a healthier attitude toward wealth, and their fellow citizens, and want to use their gifts to improve America, and not exploit it.
It’s psychopathy. Maybe combined with OCD?
Stupify them
Pretty sure they already have been. I’m convinced more money makes you more stupid.
I would desperately love for companies to lose big on LLMs. The vast majority of users just don’t seem worth the huge energy costs. I do think there are a number of worthwhile ML applications that could make the world better, but I have little faith that they’ll be allowed to unless they generate big profits.
