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Welcome back! After Microsoft bought the rights to use OpenAI’s technology for free, Microsoft developed a case of Copilot fever, launching Copilot-branded AI features in dozens of products, from Office and Bing to PowerBI and Dynamics. Microsoft appears to be dialing it back a bit, seemingly in response to complaints from customers that the Copilots are unnecessary or annoying. This week, for instance, newly appointed Xbox CEO Asha Sharma announced that Gaming Copilot, a chatbot built into Xbox’s mobile and PC gaming apps, would be wound down. That followed a similar move in March by Pavan Davuluri, who runs Windows, in “reducing unnecessary Copilot entry points” in Windows 11, including the Copilot chatbot that showed up in Photos, Widgets and Notepad apps. Davuluri said in a blog post that the decision was based on feedback from Windows users who “want it to be better.” It now seems likely that Microsoft will continue to cull Copilots as it tries to streamline its AI efforts. CEO Satya Nadella earlier this year carried out a large reorganization that combined the consumer and enterprise versions of Copilot into a single organization, in part to make the company’s AI product strategy less redundant. “It’s critical that we remove Copilot from places where it doesn’t live up to its promise,” Microsoft executive vice president Jacob Andreou said Tuesday in a now-deleted post on X. Andreou, who was elevated during Nadella’s recent restructure, is leading the now-combined product groups building Copilot. In Microsoft’s apps, Copilots typically show up as a sidebar featuring a cheery AI assistant in a text box. It can summarize what people see on their screens, such as giving an overview of a website, explaining what different system settings do, or copying data from an online source into an Excel document, for instance. Not every customer was a fan. While some said they got a lot of mileage out of certain Copilot features—like those that transcribed and summarized Teams meetings or drafted emails—I subsequently heard from customers that other auxiliary Copilots ranged from unnecessary to “functionally useless.” It makes sense that Microsoft would roll back some of its vestigial Copilots now that it’s demonstrating stronger momentum in boosting revenue in Microsoft’s core software business. Nadella has said he wants Microsoft to focus on Copilot features that enterprise customers find valuable, such as its Office 365 Copilot, which saw a 33% surge in paying users last quarter. 365 Copilot is powered in part by new Anthropic models and can automate workplace errands like booking meetings, generating PowerPoint presentations, or creating financial models in Excel. The moves could also lead to less confusion among potential Copilot customers. In one recent illustration of the Copilot bloat, the tech commentator Tey Bannerman tallied the number of distinct Copilot products at 81 (although the figure was arguably inflated because it treated the same Copilots as being different if they were part of different pricing tiers). Bannerman’s visual went mildly viral and also got the attention of lots of Microsoft staff, according to two current employees. Microsoft’s narrowing focus is reminiscent of how other AI companies are dialing back product bloat. OpenAI has been trying to unify its products into a single “super app” and eliminate “side quests” (although progress on that front has been debatable). There could also be a financial upside to culling unpopular Copilots: Microsoft said during its quarterly earnings last week that the cost of running some of its Copilots was dragging down margins in some corners of its business, even as it makes Copilot run more efficiently. Winding down Copilots, especially those in Windows that people aren’t paying extra for, could help ease that margin pressure.
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