Microsoft Faces Uphill Battle as Copilot Struggles Against ChatGPT in Enterprise Market

Microsoft reportedly 'struggling' to convince companies to buy Copilot -- yup, employees prefer ChatGPT

It'd be fair to say ChatGPT has become deeply ingrained in our lexicon, and it's almost a shorthand for wider AI models now in the same way that consumers call any tablet an iPad. OpenAI's offering was one of the first LLMs to reach mass market penetration thanks to its open source nature, and while the likes of Google Gemini are catching up, it appears the popularity of ChatGPT is having a negative impact on Microsoft's own Copilot. A new report from Bloomberg has suggested that businesses that have stumped up the cash for Copilot's enterprise features are still finding employees using ChatGPT instead. According to the report, pharmaceutical company Amgen has paid for a 20,000 user plan for Microsoft Copilot, but more than a year later its employees still prefer to work using ChatGPT. There's plenty of crossover, too. OpenAI's models form part of Copilot's own LLM, and despite the similarities and overlapping features like data analysis and email drafts, ChatGPT remains much more popular. TechRadar reports that as of this month, ChatGPT has almost 800 million weekly active users (3 million paying ones) while Copilot has 20 million weekly users for the last year. "The company's [Microsoft's] salespeople knew ChatGPT dominated the consumer chatbot market, but expected Microsoft to own the enterprise space for AI assistants thanks to decades-long relationships with corporate IT departments," the report explains. "But by the time Microsoft began selling Copilot to businesses, many office workers had already tried out ChatGPT at home, giving the chatbot a first-mover advantage." That's despite the prevalence of Windows across the globe, and while Microsoft has sold millions of dollars worth of Copilot accounts, OpenAI still has the edge it seems. Despite rapid advancements across the board, ChatGPT continues to dominate the AI market. The likes of Claude and Gemini offer increasingly competitive chatbot experiences, and Meta, Copilot, and a variety of other brands are offering AI technology to match. ChatGPT has held a dominant position, likely due to its history as the first major chatbot and the one that has become synonymous with the technology. However, its competitors are gaining in popularity. Whether it is a branding problem or simply the challenge of pulling people away from their number 1 chatbot, Copilot seems to be in a similar boat to many other major AI providers right now.

Microsoft is struggling to sell Copilot to corporations - because their employees want ChatGPT instead

AI chatbot models like ChatGPT and Microsoft Copilot are gaining huge traction in the workplace and beyond, but OpenAI's model is reportedly starting to show dominance in the business world. A Bloomberg report has claimed even businesses which have purchased Copilot plans are struggling to convince users to make the switch, with drugmaker Amgen buying a 20,000 user plan, only to have employees continue using ChatGPT over a year later. It is not the only customer to report issues, as workers shun Microsoft Copilot in favor of ChatGPT, which is used more at home and thus become more familiar to many. Microsoft does use OpenAI's models to power Copilot, and offers very similar features to ChatGPT, with information summaries, email drafting, data analysis, and image generation. That being said, ChatGPT's momentum and existing user base seems to be giving the chatbot the edge. As of June 2025, ChatGPT has almost 800 million weekly active users, and 3 million paying business users, whereas Copilot has stagnated a little, with 20 million weekly users for the past year. Theoretically, the race should be a little more even, since Windows is such a dominant operating system in the professional world. Microsoft salespeople have traditionally been able to use Windows compatibility as an effective selling point, but that's no longer the case, the report suggests; "The company's [Microsoft's] salespeople knew ChatGPT dominated the consumer chatbot market, but expected Microsoft to own the enterprise space for AI assistants thanks to decades-long relationships with corporate IT departments. But by the time Microsoft began selling Copilot to businesses, many office workers had already tried out ChatGPT at home, giving the chatbot a first-mover advantage." Despite negotiating with companies such as Volkswagen, Accenture and Barclays, which all signed deals for over 100,000 accounts in agreements worth 'tens of millions' a year, Microsoft still lags behind OpenAI in its user base, and organizations are having to encourage workers to use the chatbot. The news comes after Microsoft has announced largescale layoffs, with between 6,000 and 7,000 jobs worldwide expected to be cut - amounting to nearly 3% of the firm's workforce - just two years after 10,000 personnel were made redundant (5% of the workforce).

Microsoft Is Having an Incredibly Embarrassing Problem With Its AI

Despite investing tens of billions of dollars into OpenAI, tech giant Microsoft has a problem: it's in direct competition with its business partner, and OpenAI is winning. As Bloomberg reports, Microsoft salespeople are having trouble wooing both potential and existing customers with the company's Copilot, its AI assistant built on OpenAI's tech. Basically, it feels like a worse version of ChatGPT -- which has a free version online. Some companies, like the New York Life Insurance Co, told the magazine that they've purchased both to see which employees prefer. For the drugmaker Amgen, which bought Copilot software for 20,000 of its staffers only for them to ignore it in favor of ChatGPT, the winner is clear. As Amgen senior vice president John Bruich told Bloomberg [it has a website but i wouldn't call it a website when it has a print magazine], employees at the pharmaceutical company still use Copilot when they're forced to by Microsoft-specific apps like Outlook and Teams. Nevertheless, they seem to prefer ChatGPT for tasks like research and document summarizing because, apparently, it's just better and more enjoyable. "OpenAI has done a tremendous job making their product fun to use," Bruich said. According to Bloomberg's unnamed insider sources, Microsoft itself is partially to blame for falling behind its partner at OpenAI. Because Copilot wasn't launched until November 2023, a full year after ChatGPT dropped, employees at the companies Microsoft pitches to had already begun experimenting with the OpenAI chatbot for themselves. Even now, OpenAI updates still take weeks to integrate into Copilot. As Microsoft workplace AI czar Jared Spataro told Bloomberg, the company insists on testing each out before letting them go live because, as he puts it, "not every change that is being made to the models actually is net positive." As the two tech companies hash out the shaky future of their multi-billion-dollar partnership behind the scenes, employees at longtime Microsoft customer Bain & Company seem to have chosen a side. Representatives from the management firm told Bloomberg that it recently deployed ChatGPT to some 16,000 of its employees, many of whom are now using it regularly. Comparatively, only 2,000 Bain & Co employees regularly use Copilot, and even they are mostly utilizing it as an assistant on programs locked into the Microsoft ecosystem, like Excel. At the end of the day, according to Bain & Co chief technology officer Ramesh Razdan, it seems that workers just don't respond to Copilot as well as ChatGPT. "It's improving," Razdan said of the Microsoft AI assistant, "but I don't think it's at the same level."

OpenAI is nabbing Microsoft customers, fueling partners' rivalry

(Bloomberg) -- Last spring, drugmaker Amgen announced plans to buy Microsoft's Copilot AI assistant for 20,000 employees. It was a timely endorsement of the software company's multibillion-dollar bet on generative artificial intelligence, and Microsoft touted its new Copilot customer in three separate case studies. Thirteen months later, Amgen employees are using a rival product: OpenAI's ChatGPT. Amgen expanded its use of ChatGPT this year after seeing the technology improve and hearing from employees that it helped with such tasks as research and summarizing scientific documents. "OpenAI has done a tremendous job making their product fun to use," said Senior Vice President Sean Bruich. Copilot is still a "pretty important tool," he added, but more so for use with Microsoft products such as Outlook or Teams. OpenAI's nascent strength in the enterprise market is giving its partner and biggest investor indigestion. Microsoft salespeople describe being caught flat-footed at a time when they're under pressure to get Copilot into as many customers' hands as possible. The behind-the-scenes dogfight is complicating an already fraught relationship between Microsoft and OpenAI. Since investing almost $14 billion in OpenAI, Microsoft has backed rival AI startups, started building its own AI models and is balking at signing off on its partner's restructuring plan. OpenAI has inked deals with rival cloud computing partners and spent much of the past two years building out a suite of paid subscription products for businesses, schools and individuals. The startup recently agreed to acquire AI coding assistant Windsurf, which competes with Microsoft's GitHub Copilot. It's unclear whether OpenAI's momentum with corporations will continue, but the company recently said it has 3 million paying business users, a 50% jump from just a few months earlier. A Microsoft spokesperson said Copilot is used by 70% of the Fortune 500 and paid users have tripled compared with this time last year. Gartner analyst Jason Wong said many companies are still testing Copilot with relatively few employees, leaving room for various software vendors to win customers. But for now, he said, it's "kind of a showdown" between OpenAI and Microsoft. This story is based on conversations with more than two dozen customers and salespeople, many of them Microsoft employees. Most of these people asked not to be named in order to speak candidly about the competition between Microsoft and OpenAI. Both companies are essentially pitching the same thing: AI assistants that can handle onerous tasks -- researching and writing; analyzing data -- potentially letting office workers focus on thornier challenges. Since both chatbots are largely based on the same OpenAI models, Microsoft's sales force has struggled to differentiate Copilot from the much better-known ChatGPT, according to people familiar with the situation. Asked about ChatGPT's traction, Microsoft's chief of workplace AI initiatives, Jared Spataro, said "awareness in the consumer space doesn't necessarily translate into fit for use in the commercial space." Microsoft's "sweet spot," he added, is taking the best technology available and fine-tuning it for business use. An OpenAI spokesperson said his company is benefiting from customers' desire for direct access to the latest expertise and technology. Microsoft's ubiquity should theoretically give it an advantage. The Windows operating system dominates the workplace, and the company is baking AI into the world's most widely used suite of productivity apps. Traditionally, Microsoft salespeople have been able to persuade customers to buy the newest whiz-bang because it works well with their existing software, cybersecurity defenses and procurement practices. The company's salespeople knew ChatGPT dominated the consumer chatbot market, but expected Microsoft to own the enterprise space for AI assistants thanks to decades-long relationships with corporate IT departments. But by the time Microsoft began selling Copilot to businesses, many office workers had already tried out ChatGPT at home, giving the chatbot a first-mover advantage. It doesn't help that OpenAI updates often take weeks before showing up in Microsoft software, thanks in part to bureaucratic snarls, the people said. Spataro said Microsoft does its own testing on each OpenAI release to ensure it'll improve user experience and maintain security standards. "Not every change that is being made to the models actually is net positive," he said. With many office workers already familiar with ChatGPT and convinced that it's a better product, some companies are letting employees test both assistants. New York Life Insurance, another Microsoft customer, is rolling out ChatGPT and Copilot to all 12,000 personnel. After monitoring the trial and seeking feedback, the company will reevaluate which tools it wants to use for the long run. "There's a lot of different roles and day-to-day tasks that these individuals do," said Chief Data and Analytics Officer Don Vu. "And so our thought was, 'Let's roll out both tools, let's take some time to evaluate kind of the usage, traction, adoption and network effects of all of these, and let's see what really sticks.'" Vu and other IT executives acknowledge that Copilot's deep integration with Microsoft apps gives it a potential advantage. Over the years, upstart products from the likes of Zoom Communications, Slack and Box have struggled to compete with Microsoft's unified bundle of offerings. While noting there's a strong constituency for ChatGPT, Gartner's Wong said buying Copilot is generally the "path of least resistance." Finastra Group Holdings opted for the Microsoft chatbot and has found it necessary to encourage ChatGPT fans to at least try Copilot. Adam Lieberman, the company's chief AI officer, said people eventually come to appreciate the tool's functionality and integration with existing apps. "If you've used ChatGPT at home," he said, "you may be a little less familiar with some of the other tools." Microsoft's salespeople are quick to tell potential customers that Copilot, at $30 per month per user, is usually a lot cheaper than ChatGPT Enterprise, which Gartner says has gone for as much as $60. "Pricing is good -- I think that that always factors in," Finastra's Lieberman said of Microsoft's Copilot. Copilot's price advantage may not endure, however. OpenAI has introduced a pricing model based on usage rather than a flat fee, according to the company spokesperson, potentially lowering per-employee costs and fueling adoption. OpenAI is also offering discounts to customers that agree to buy additional AI products, The Information reported last week. The rivalry isn't stopping Microsoft from notching big wins. Employees were told during an internal event earlier this month that multiple dozen customers including Barclays, Accenture and Volkswagen each have over 100,000 paying users of Copilot, according to people familiar with the presentation. Chief Executive Officer Satya Nadella lauded the progress so far but also made clear that the company needs to get hundreds of millions of people using its family of AI apps. That could be tough if customers keep opting for OpenAI. Bain & Co, another longtime Microsoft customer, has deployed ChatGPT to about 16,000 employees, the vast majority using it regularly. Only about 2,000 personnel use Copilot, mostly for assistance on work with Microsoft programs like Excel. Employees just haven't responded as well to Copilot, said Chief Technology Officer Ramesh Razdan. "It's improving, but I don't think it's at the same level as ChatGPT."