NEW YORK, Feb 5, 2026, 06:21 EST
- A Wall Street Journal report flagged branding and integration problems for Microsoft’s Copilot
- New survey data shows Copilot losing share among U.S. paid AI subscribers as ChatGPT holds the lead
- Microsoft says Copilot usage is rising, but investors are watching whether seats turn into daily use
Microsoft’s Copilot is running into trouble as it tries to become a true ChatGPT alternative, with confusing branding and product integration issues holding back adoption, the Wall Street Journal reported. Seekingalpha
The timing matters. Microsoft has bet that “Copilot” features across Office, Windows and other software can become a new layer of paid growth, at the same time it pours money into data centers and chips to run AI services.
That spending race is getting louder. Alphabet has told investors it could sharply lift capital spending in 2026 as it pushes ahead in AI, and the scale of those outlays is sharpening questions across Big Tech about what the payback looks like and when it shows up in revenue. Reuters
A separate report from research firm Recon Analytics suggests Microsoft’s distribution advantage inside corporate software is not translating into user preference. Recon said Copilot’s share as the “primary platform” among U.S. paid AI subscribers fell to 11.5% in January 2026 from 18.8% in July 2025, while ChatGPT held about 55.2% and Google’s Gemini rose to 15.7%. “Distribution advantages do not lock in market position,” analyst Joe Salesky wrote. Reconanalytics
Recon’s data also points to a workplace problem: when workers can choose, they often don’t stick with the tool their employer buys. Among workers with both Copilot and ChatGPT available, Copilot adoption dropped to 18% while ChatGPT took 76%, the firm said.
Microsoft, for its part, has been pointing to rising usage and seat sales. It has said Microsoft 365 Copilot is “becoming a true daily habit,” with daily active users up 10 times year-on-year, and that it has 15 million paid Microsoft 365 Copilot “seats” — paid user licenses — with seat additions up more than 160% year-on-year. The company also said daily users of the consumer Copilot app rose nearly threefold year-on-year and that “Copilot experiences span chat, news feed, search, creation, browsing, shopping, and integrations into the operating system.” Windowslatest
The money behind that push is heavy. Microsoft reported capital expenditures of $37.5 billion in the October-to-December quarter, with Chief Financial Officer Amy Hood describing a “very direct correlation” many investors make “between the CapEx spend and seeing an Azure revenue number.” Capex is capital spending, including items such as chips and data-center gear, and Hood said the company allocates GPUs across first-party products such as Microsoft 365 Copilot and GitHub Copilot as well as Azure. Investing
But the gap between licenses and habit is the risk case that keeps coming back. If employees keep defaulting to ChatGPT or Gemini, Microsoft may have to spend more on fixes, training and incentives — or accept slower monetization — while still carrying the cost of the AI infrastructure.
Rivals are not standing still. Google CEO Sundar Pichai said its Gemini app topped 750 million monthly active users by the end of the December quarter, and an analyst quoted by Reuters said a market narrative is forming that favors Google over OpenAI. That kind of momentum raises the bar for Microsoft to show Copilot can win not just procurement decisions, but actual daily use. Reuters
For Microsoft, the next test is less about how many Copilot logos it can ship and more about whether the product feels like one thing — and works cleanly across tools — before renewal cycles force customers to pick a winner.
