Microsoft’s Nadella Not Happy With Copilot Development

Microsoft CEO Satya Nadella is reportedly unhappy with an element of his company’s artificial intelligence (AI) progress.

That’s according to a report Monday (Dec. 22) from The Information, citing an in-house email reviewed by the publication.

That message was from Nadella to Microsoft engineers working on a consumer version of the company’s artificial intelligence (AI) assistant Copilot. A manager on the email thread pointed out Google Gemini’s progress in connecting that chatbot to Google Drive for certain tasks.

Nadella, however, seemed unhappy with the way Microsoft’s version of that technology had performed thus far, saying that the company’s programs for connecting Copilot with Gmail and Outlook “for [the] most part don’t really work” and are “not smart,” the report added.

A spokesperson for Microsoft declined to comment when reached by PYMNTS.

According to The Information, the last few months have seen the CEO become Microsoft’s “most influential product manager,” telling employees in September that he would delegate some duties as he focused more on the company’s AI products.

Sources told the news outlet that Nadella has become active in an internal Teams channel for roughly 100 of Microsoft’s top technical staff, posting often when he thinks AI products are falling short. He also holds a weekly hourlong meeting with many of those same workers, grilling them about their jobs, said a source who had listened to those meetings.

“He wants to minimize his distractions to stay focused on what Microsoft needs to do for AI,” said Madrona Venture Group managing partner S. Somasegar, a former Microsoft executive and friend of Nadella.

In other Microsoft news, PYMNTS wrote Monday about the company’s views on AI in the banking sector following a recent blog post in which it argued that financial services firms are entering a decisive phase in AI adoption.

Within that phase, the company argued, success is less about experimentation and more to do with reconfiguring core business processes around agentic AI.

Microsoft points to an IDC study it had commissioned that showed that firms that embed AI agents but still keep humans in the loop are seeing returns on AI investments roughly three times greater than slower adopters.

“Microsoft identifies five predictors for AI success in 2026: anchoring AI initiatives to value creation, building AI fluency across the workforce, expanding innovation across multiple business functions, embedding responsible AI and regulatory readiness as competitive advantages, and modernizing data foundations to support scale.

The company also spotlighted “real-world examples, from insurers using AI agents to resolve large volumes of customer calls autonomously to banks investing heavily in skilling programs that drive daily AI usage,” PYMNTS added.