<div id="readability-page-1"><div id="ArticleBody-InlineImage-108260991"><div><div><p>FILE PHOTO: Judson Althoff, CEO of Microsoft's commercial business, appears during an interview in San Francisco on Jan. 27, 2017.</p><p>David Paul Morris | Bloomberg | Getty Images</p></div></div></div><div><p><span id="RegularArticle-QuoteInBody-1">Microsoft<span><span id="-WatchlistDropdown"></span></span></span> has made greater inroads with sales of its Copilot artificial intelligence add-on for business clients after facing criticism for relatively low adoption in recent months, executive Judson Althoff told employees on Thursday.</p><p>Software stocks including Microsoft have come down this year on fears that generative AI models could heighten competition. Microsoft, whose stock sunk 23% in the first quarter, has ramped up spending on data centers for cloud customers such as OpenAI, and investors are seeking signs that products enhanced with AI models will boost revenue and profitability.</p><p>In January, Microsoft said it had racked up 15 million seats for the Microsoft 365 Copilot that sits atop commercial productivity software subscriptions, representing 3% of seats for the standard bundles. Microsoft 365 corporate users have access to a Copilot Chat assistant with limited features. CEO Satya Nadella told analysts on an earnings call that the company had &#34;multiples more enterprise chat users.&#34;</p><p>The $30-per-month Microsoft 365 Copilot became widely available in 2023, and since then, many analysts have described adoption as nascent. After the January disclosure, analysts at UBS, who recommend buying Microsoft shares, said they had expected more subscribers.</p><p>Sellers had been trying to land paid Microsoft 365 Copilot seats and get everyone else using Copilot Chat, but Microsoft revamped its strategy after receiving feedback from analysts on the results, Althoff, CEO of the company's commercial business, said in a town hall meeting, according to a transcript that CNBC reviewed.</p><p>Microsoft did not immediately have a comment. Bloomberg reported earlier on the remarks.</p><p>Althoff said he and Amy Hood, Microsoft's finance chief, issued bold goals for the March quarter, which ended on Tuesday. </p><p>&#34;Those were hit for Q3,&#34; Althoff said.</p><p>The company has set fresh ambitious targets for the June quarter.</p><p>&#34;I actually feel very confident in those numbers,&#34; he said.</p><p><strong>WATCH:</strong> 'Seat decline' in workforce a looming risk for Microsoft, says Deepwater's Gene Munster</p></div><div><p>Choose CNBC as your preferred source on Google and never miss a moment from the most trusted name in business news.</p></div></div>

MSFT

<p>Microsoft's executive Judson Althoff reported increased sales traction for the Microsoft 365 Copilot AI add-on, despite initial low adoption rates. The $30-per-month service has reached 15 million seats, representing only 3% of standard subscriptions. Analysts have noted that adoption is still in early stages, and Microsoft has adjusted its strategy based on feedback. The company aims for ambitious targets in the upcoming quarters, with confidence in achieving them, as it continues to invest in AI and cloud infrastructure.</p>

- Microsoft is seeing increased sales of its Copilot AI add-on for businesses after previously low adoption rates, according to Judson Althoff.  
- The company's stock fell 23% in the first quarter due to concerns over rising competition in generative AI, prompting Microsoft to enhance investment in data centers and AI products.  
- Despite initial slow adoption, Microsoft reported 15 million seats for Copilot and is optimistic about meeting new targets set for the upcoming June quarter.

Microsoft executive touts Copilot sales traction as AI anxiety weighs on stock