Shares of Microsoft Corp. experienced a notable decline following a report that revealed the tech giant has scaled back its expectations for business customer spending on artificial intelligence tools within its cloud marketplace.
Report Details Lowered Sales Targets
According to a report from The Information published on December 3, 2025, several divisions within Microsoft have reduced sales quotas for certain AI products. This adjustment came after many sales personnel failed to meet their targets in the fiscal year that concluded in June. The report, citing sources within the Azure cloud division, indicates a strategic shift as the company responds to resistance from businesses willing to pay premium prices for AI capabilities.
Specifically, one sales unit had initially tasked its team with increasing customer spending on the Microsoft Foundry marketplace—a hub for AI models and agent-building tools—by a substantial 50 per cent in the last fiscal year. However, fewer than one-fifth of the salespeople in that unit achieved this goal. In response, Microsoft reportedly lowered the growth target to approximately 25 per cent for the current fiscal year.
Market Reaction and Company Response
The news triggered a market reaction, with Microsoft's stock falling as much as three per cent during trading in New York on Wednesday. The decline was partially recovered as investors and analysts further scrutinized the report's claims.
Microsoft swiftly issued a denial of the report's central premise. A company spokesperson stated in an emailed response that the story "inaccurately combines the concepts of growth and sales quotas," asserting that aggregate sales quotas for AI products have not been lowered. This rebuttal was later highlighted by financial network CNBC.
Broader Skepticism in the AI Gold Rush
This development underscores a growing wave of skepticism washing over the massive investments being made in artificial intelligence infrastructure. Microsoft, alongside its Big Tech rivals like Alphabet's Google, Meta Platforms, and Amazon.com, has been pouring billions into chips, servers, and data centres to power the AI computing boom.
However, the return on this investment is being questioned. The Information's report pointed to feedback from businesses struggling to quantify the savings generated by using AI for routine tasks. A significant concern remains the technology's propensity for errors, which can lead to costly mistakes, dampening enthusiasm for widespread, expensive adoption.
Analysts from Jefferies offered a counterpoint in a research note, suggesting the publication "completely missed the point." After discussions with Microsoft management, Jefferies advised investors to focus on the company's accelerating remaining performance obligations—a key indicator of future revenue. They also noted robust adoption of Microsoft's flagship Copilot line of AI assistants, which is distinct from the Foundry marketplace model sales.
The situation highlights the complex and evolving landscape of enterprise AI adoption, where proving tangible value is becoming as crucial as developing the technology itself.
