Satya Nadella is burning decades of customer good will chasing the latest tech fad. (Image credit: Getty Images | MANDEL NGAN)

If there’s one thing that typifies Microsoft under CEO Satya Nadella’s tenure: it’s a general inability to connect with customers.

Microsoft shut down its retail arm quietly over the past few years, closed up shop on mountains of consumer products, while drifting haphazardly from tech fad to tech fad. From blockchain to "metaverse" and now to artificial intelligence — Microsoft CEO Satya Nadella can’t seem to prioritize effectively, and the cracks are starting to shine through.

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There are reams of research that suggest agentic AI tools require human intervention at a frequency ratio that makes them cost ineffective, but Microsoft seems unbothered that its tools are poorly conceived.

In any case, OpenAI is supposedly going to launch future models of ChatGPT early in attempts to combat the rise of Google Gemini. I suspect the issues are deeper for Microsoft, who have worked tirelessly under Satya Nadella to create doubt around its products.

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SEO and analytics firm FirstPageSage has released its AI market share report for the start of December, and it shows Google Gemini actively poised to supplant Microsoft Copilot. Based on reports that Google Gemini is now actively beating ChatGPT’s best models, FirstPageSage has Google Gemini sprinting past Microsoft Copilot quarter over quarter, although ChatGPT itself will remain the front runner.

Google’s AI advantages are accumulating, as Microsoft’s disadvantages snowball

Microsoft’s destiny under Satya Nadella seems to increasingly point towards being a server broker for NVIDIA, rather than tech leader and innovator. (Image credit: Microsoft)

Whether it’s Google’s Tensor server tech or dominating position with Google Play-bound Android, Microsoft’s lack of forethought and attention paid to their actual customers is starting to catch up with the firm. Nadella has sought to blame the company’s unwieldy size for the lack of innovation, but it reads like an excuse to me. It’s all about priorities — and Nadella has chased shareholder sentiment over delivering for its customers or employees, and that short-termism is going to put Microsoft on the backfoot if AI actually does deliver another computing paradigm shift.

Microsoft depends almost entirely on pricy NVIDIA technology for its data centers, whereas Google is actively investing to own the entire stack. Microsoft has also worked incredibly hard to cram half-baked AI features into its products, whereas Google has arguably been a lot more thoughtful in its approach. Microsoft sprinted out of the gate like a bull in a China shop, and investors rewarded them for it — but fast forward to 2025, and Google’s AI products simply work better, and are more in-tune with how people might actually use them.

I am someone who is actively using the AI features across Google Android and Microsoft Windows on a day to day basis, and the delta between the two companies is growing ever wider. Basic stuff like the photo editing features on Google Pixel phones are *lightyears *beyond the abysmal tools found in the Microsoft Photos app on Windows. Google Gemini in Google Apps is also far smarter and far more intuitive than Copilot on Microsoft 365, as someone actively using both across the two businesses I work in.

Microsoft’s "ship it now fix it later" attitude risks giving its AI products an Internet Explorer-like reputation for poor quality.

Dare I say it, Gemini is actually helpful, and can usually execute tasks you might actually need in a day to day job. "Find me a meeting slot on this date to accommodate these timezones" — Gemini will actually do it. Copilot 365 doesn’t even have the capability to schedule a calendar event with natural language in the Outlook mobile app, or even provide something as basic as clickable links in some cases. At least Xbox’s Gaming Copilot has a beta tag to explain why it fails half of the time. It’s truly absurd how half-baked a lot of these features are, and it’s odd that Microsoft sought to ship them in this state. And Microsoft wants to make Windows 12 AI first? Please.

Microsoft’s "ship it now fix it later" attitude risks giving its AI products an Internet Explorer-like reputation for poor quality, sacrificing the future to more patient, thoughtful companies who spend a little more time polishing first. Microsoft’s strategy for AI seems to revolve around offering cheaper, lower quality products at lower costs (Microsoft Teams, hi), over more expensive higher-quality options its competitors are offering. Whether or not that strategy will work for artificial intelligence, which is exorbitantly expensive to run, remains to be seen.

Microsoft’s savvy early investment in OpenAI gave it an incredibly strong position early on, but as we get deeper into the cycle, some cracks are starting to show. Many of Microsoft’s AI products to date simply scream of a total lack of direction and utter chaos, but it’s not all hopeless. Some of Microsoft’s enterprise solutions for AI are seeing strong growth. Github Copilot has been something of a success story for Redmond, and Microsoft is exploring its own Maia and Cobalt chips and even language models, in attempts to decouple itself from NVIDIA and OpenAI respectively. But Satya Nadella’s Microsoft has an uncanny knack for failing to deliver on promising initiatives like those.

Without a stronger emphasis on quality, Microsoft’s future in AI could simply end up revolving around re-selling NVIDIA server tech and jacking up local electricity prices, rather than providing any real home-grown innovation in the space. Shareholders will be more than happy for Microsoft to simply be a server reseller, but it would be a ignoble legacy for what was previously one of tech’s most innovative companies.

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Jez Corden is the Executive Editor at Windows Central, focusing primarily on all things Xbox and gaming. Jez is known for breaking exclusive news and analysis as relates to the Microsoft ecosystem while being powered by tea. Follow on Twitter (X) and tune in to the XB2 Podcast, all about, you guessed it, Xbox!