Dell admits consumers don't care about AI PCs as Microsoft's Copilot strategy falters

Reviewed byNidhi Govil

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Dell executives revealed at CES 2026 that consumer interest in AI PCs has fallen short of expectations, with buyers finding AI features more confusing than helpful. The admission marks a significant shift in marketing strategy from last year's AI-first approach and raises questions about Microsoft's Copilot vision as the company scrambles to salvage its AI PC initiative.

Dell Abandons AI-First Marketing as Consumer Interest Falls Flat

Dell has made a striking admission that challenges the tech industry's AI hype: consumers don't care about AI PCs. At a press briefing ahead of CES 2026, Kevin Terwilliger, Dell's head of product, acknowledged that the company's messaging about its 2026 PC lineup is not "AI first"—a significant departure from last year's strategy. "What we've learned over the course of this year, especially from a consumer perspective, is they're not buying based on AI," Terwilliger stated bluntly. "In fact I think AI probably confuses them more than it helps them understand a specific outcome."

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Source: Futurism

Source: Futurism

This honest assessment from one of Microsoft's biggest PC partners comes as a blow to the software giant's push for Copilot Plus PCs. Dell Vice Chairman and Chief Operating Officer Jeff Clarke described AI as an "unmet promise," noting that the company had "an expectation of AI driving end-user demand" but "it hasn't quite been what it was going to be a year ago."

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Microsoft's Copilot Struggles to Gain Traction

The shift in marketing strategy exposes deeper problems with Microsoft's Copilot initiative. While every new PC that leading OEMs ship this year will technically be an AI PC—equipped with either a Qualcomm Snapdragon X processor, Intel Core Ultra Series 3, or AMD Ryzen AI CPUs with NPU (Neural Processing Unit) capabilities—the AI features themselves aren't driving sales.

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Source: Stuff

Source: Stuff

Microsoft's flagship Recall feature exemplifies these challenges. The controversial AI feature eventually launched nearly a year after it was originally scheduled, delayed following security concerns raised by security experts.

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Even when AI capabilities do arrive, they haven't delivered obvious benefits for home users or taken much share from competitors like ChatGPT, Google's Gemini, or Anthropic's Claude—none of which require a fancy new "AI PC" to work.

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Source: XDA-Developers

Source: XDA-Developers

Satya Nadella Takes Direct Control Amid Growing Concerns

The lackluster reception has prompted Microsoft CEO Satya Nadella to become what The Information described as the company's "most influential product manager." Nadella, who saw Microsoft miss the platform shift to mobile devices and tablets, desperately wants to avoid another failure in this momentous platform shift. He is conscious of the perception that the consumer version of Copilot lags behind competitors like Gemini, and has recently sent notes directly to product groups working on Copilot's consumer app with feedback on bugs and shortcomings.

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This represents a familiar pattern for Microsoft: shipping half-baked products, then iterating slowly as the market experiments. That approach might work for a startup, but it's proven problematic for a company of Microsoft's size. Customers try the unfinished product, develop negative impressions, and those reviews spread even as flaws get fixed.

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Hardware Improvements Overshadow AI Capabilities

Dell was among Microsoft's partners for the initial Copilot Plus PC launch in 2024, adding Qualcomm's Snapdragon X Elite chips to its popular XPS 13 and Inspiron line of laptops. However, most of the benefits in Copilot Plus PCs come from the improved battery life and performance of Qualcomm's chips, instead of AI features alone.

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At CES 2026, Dell revived the XPS brand and refocused on hardware improvements that are not directly tied to generative AI or chatbots.

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While Terwilliger confirmed that every new Dell system announced at CES 2026 has an NPU inside for AI workloads, he acknowledged consumers aren't buying new hardware simply because it contains AI components.

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Power users, who typically run more intense workloads and require stability and horsepower, aren't hitting the Copilot button because their needs are fundamentally different and AI wouldn't help them with their tasks anyway.

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Business Market Faces Similar Skepticism

The challenges extend beyond consumer markets. While Microsoft's real revenue engine is business customers—where licenses are sold 100,000 at a time and IT controls the ecosystem—even there, enterprise customers may decide they don't need to pay another $20 per user per month for a benefit that isn't materializing.

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With consumers already spending thousands of dollars to build or buy capable systems for work or gaming, and a major memory shortage expected in 2026, no amount of chatbot acceleration is likely to drive satisfaction.

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Dell's decision to refocus on meeting actual customer demand rather than where the industry insists they should be represents a pragmatic approach. The powerful neural processing units in these machines may find workloads where they can demonstrate value in a year or two, but until Microsoft's many Copilots are ready for that role, Windows PC makers will have to sell their new hardware the old-fashioned way.

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