Dec 3 (Reuters) - Multiple divisions at Microsoft (MSFT) have lowered sales growth targets for certain artificial intelligence products after many sales staff missed goals in the fiscal year that ended in June, The Information reported on Wednesday.
It is rare for Microsoft to lower quotas for specific products, the report said, citing two salespeople in the Azure cloud unit. The division is closely watched by investors as it is the main beneficiary of Microsoft's AI push.
Shares of one of the biggest winners of the AI boom due to its early bet on ChatGPT-maker OpenAI fell nearly 3%, but pared losses after CNBC reported, citing Microsoft, that it has not lowered sales targets. The stock was last down 1.5%.
Microsoft did not immediately respond to a Reuters request for comment. Reuters could not independently verify the report from The Information.
WORRIES OVER AI BUBBLE
Lower sales growth goals for its AI products are likely to fans fears about real-world adoption of the technology as investors fear the frenzy driving up valuations has turned into a bubble. An MIT study from earlier this year had found that only about 5% of AI projects advance beyond the pilot stage.
The Information report said Carlyle Group last year started using Copilot Studio to automate tasks such as meeting summaries and financial models, but cut its spending on the product after flagging Microsoft about its struggles to get the software to reliably pull data from other applications.
The report shows the industry was in the early stages of adopting AI, said D.A. Davidson analyst Gil Luria. "That does not mean there isn't promise for AI products to help companies become more productive, just that it may be harder than they thought."
U.S. tech giants are under investor pressure to prove that their hefty investments in AI infrastructure are generating returns.
RECORD SPENDING
... continue reading