Microsoft is urging enterprise customers to treat PC refreshes like AI investments, with Windows and Device Sales corporate vice president Mark Linton saying the "tokenomics" of AI is getting "very challenging" and that agents on frontier models quickly become expensive. Microsoft became headline sponsor of the Canalys Forum in Barcelona early last month for the first time ever, seeking distributor and reseller backing for Copilot, Cowork and AI computers. Linton said his goal, if Windows pivots to an agentic platform, is to have PC spend be part of AI spend rather than just PC refresh budget, with smaller models running locally on powerful PCs with lots of memory to keep data local, avoid cloud token costs, and gain better latency and control. Microsoft reported that revenue in its Windows OEM and Devices division shrank 22 percent from last year to $3.55 billion in Q1 of fiscal 2027, ended September 30, and warned Q2 revenue may be down 30 percent. CFO Amy Hood cited elevated inventory levels, PC market demand and a prior year comparable that benefited from Windows 10 end of support. IDC said calendar Q3 PC shipments sank to 62.7 million units, down 20.1 percent year-on-year, translating into 15.8 million fewer sales into distributors' warehouses. Omdia said upstream component cost increases have fully worked their way through to end-market pricing.