Microsoft is facing a major setback with its Copilot AI, as fewer than 4.5 per cent of its 450 million commercial Microsoft 365 customers pay for Copilot features, and of those who do, only 20 to 30 per cent use it weekly. One analysis calculated that Copilot’s weekly active footprint inside Microsoft 365 works out to roughly one per cent of the entire customer base, despite the AI being hardwired into Word, Excel, Outlook, Teams and the Windows 11 taskbar. In a roughly 1,200 word internal memo first reported by The Information, Executive Vice President Jacob Andreou, the 33 year old former Snap executive handed control of Copilot in March, told the product’s 11,000 strong team that Copilot must “earn the right to exist”. Andreou admitted that Copilot’s excessive feature expansion had confused users and become an internal embarrassment. He had previously ordered Copilot buttons removed from certain Windows apps after data showed most users were clicking them by mistake, then immediately closing them. The rescue plan involves merging the consumer and enterprise Copilot applications into a single app by August 2026 and introducing a new class of paid, always on background AI agents branded AutoPilot. Andreou told staff the team had “stripped out what wasn’t working”, including Copilot Podcasts and Copilot Labs, both of which are being killed off.