"Microsoft Corp. shares slid after the Information reported that the software maker has lowered expectations for getting business customers to spend money on the cloud unit's marketplace for artificial intelligence models and agents. The stock was down as much as 3% in New York on Wednesday, the biggest intraday fall since Nov. 18. Several divisions at Microsoft have lowered quotas for how much salespeople are supposed to increase sales of certain AI products"
"The Information's story inaccurately combines the concepts of growth and sales quotas, which shows their lack of understanding of the way a sales organization works and is compensated, a Microsoft spokesperson said in an emailed statement. Aggregate sales quotas for AI products have not been lowered, as we informed them prior to publication. CNBC reported the company's denial earlier. Microsoft and its Big Tech rivals, including Alphabet Inc.'s Google, Meta Platforms Inc. and Amazon.com Inc., have been spending massively on chips, servers and other expenses"
"But there are signs that the market is growing skeptical that the costs are justified by an as-yet unproven technology. Some businesses have complained that it's hard to measure savings made from using AI for routine tasks and note that the technology still makes mistakes that can be costly, the Information said. One sales unit had asked salespeople to increase customers' spending on the company's Foundry marketplace by 50% in the last fiscal year, the Information said."
Microsoft shares slid after the company lowered expectations for business spending on its cloud marketplace for artificial intelligence models and agents. The stock fell as much as 3% in New York, the largest intraday decline since Nov. 18. Several Microsoft divisions reduced sales quotas after many salespeople missed targets in the fiscal year that ended in June. The change reflected customer resistance to paying more for AI. Microsoft stated that aggregate AI sales quotas have not been lowered. Big Tech has invested heavily in chips, servers and data centers for AI, while some businesses question measurable savings and note costly AI mistakes.
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