Gene Munster, a renowned tech analyst, has come to the defense of Microsoft Corp.'s (NASDAQ:MSFT) Copilot AI office tools, attributing customer drop-offs to "growing pains."
What Happened: While appearing on CNBC's Fast Money on Wednesday, Deepwater Asset Management's managing partner expressed his continued optimism about Microsoft's AI growth story.
This is despite reports of customers leaving the Copilot AI office tools. "The rub against AI is we're just not seeing the use cases yet. That will change over time," he posted on X, formerly Twitter, along with a clip of his appearance on the show.
During the conversation, Munster provided context to the situation, pointing out that only about 5 million out of approximately 450 million Office users are using the Copilot AI tools.
He stressed that this small user base should be taken into account when assessing the company's positive comments about the product over the past six months.
He said Microsoft reported during the April earnings call that 60% of Fortune 500 companies were using the AI tools. In the June quarter, the company announced that usage had doubled.
"No one's going to unseat Office, so, we're going to continue to use Office," Munster said, expressing confidence in the future of Microsoft's AI offerings.
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The rub against AI is we're just not seeing the use cases yet. That will change over time.
— Gene Munster (@munster_gene) September 4, 2024
Why It Matters: Microsoft's AI assistants, Copilots, have been under scrutiny as they were designed to revolutionize workplaces and reinvigorate Microsoft's Office productivity software. However, previously, the assistant received mixed reviews from early adopters.
Meanwhile, on Wednesday, Microsoft announced the next phase of Copilot innovation which will take place as a livestream event called "Microsoft 365 Copilot: Wave 2" on Sept. 16.
Microsoft CEO Satya Nadella and corporate vice president of AI, Jared Spataro, will be hosting the event on LinkedIn.
