Report: Microsoft 365 Copilot Has Only 8 Million Paying Subscribers

A new report claims that less than 2 percent of Microsoft 365 customers are also paying for Microsoft 365 Copilot. If true, that means there are only about 8 million paying subscribers to Microsoft’s core AI service.

In his latest newsletter, Ed Zitron cites an anonymous source in claiming that Microsoft 365 Copilot has only 8 million paying customers, at $30 a seat, compared to over 440 million Microsoft 365 commercial subscribers. This, he says, is a 1.8 percent conversion rate. And so a business that generated $33 billion in the most recent quarter only received about $240 million from Microsoft 365 Copilot subscriptions. Assuming each paid $30 per user per month, which is argues is unlikely.

It’s worth putting something else in perspective here: Zitron is a notable critic of AI and Big Tech, and he doesn’t try to hide that in the least. So some of his commentary about Microsoft and AI in this report is a bit much.

“Microsoft last reported AI revenue in January,” he notes. “Publicly traded companies — especially those where the leadership are compensated primarily in equity — tend to brag about their successes, in part because said bragging boosts the value of the thing that the leadership gets paid in. Microsoft clearly doesn’t have any good news to share … If Microsoft can’t sell this s#$t, nobody can.”

Zitron also claims that Microsoft 365 Copilot is utilizing only 60 percent of its available GPU capacity, and the firm bought over 485,000 GPUs in 2024 alone. The suggestion here is that the software giant built out this infrastructure at extravagant cost—over $20 billion per quarter over several quarters now—and is not seeing a payoff.

He also says that Microsoft is probably losing money on OpenAI despite earning a percentage of its revenues because the cost of the compute it rents to OpenAI is more expensive than those payments. But OpenAI represents most of Microsoft’s AI-based revenues. And if you leave that out, Microsoft is likely making somewhere between just $1.5 billion and $2 billion in revenues per quarter on Copilot and Azure, and it’s posting a loss. Its net income (profit) in that most recent quarter was $27.2 billion. This situation is, he says, “pathetic.”

I’m not sure what to make of this, honestly, and this newsletter is quite long and rambling, even by my standards. But it’s worth reading. If you’re also a critic of AI, you’ll love it.