Microsoft stock plummeted on Thursday due to concerns about its heavy reliance on OpenAI for nearly half of its backlog. The company’s own AI products have low adoption rates, raising red flags for investors. With $625 billion in remaining obligations, Microsoft’s exposure to OpenAI’s uncertain future poses a significant risk to its financial health.

Despite Microsoft’s massive investments in AI, its Copilot tools have struggled to gain traction. With only 15 million paid seats out of 450 million for Microsoft 365 Copilot and 4.7 million paid subscribers out of 150 million for GitHub Copilot, the company faces challenges in monetizing its AI offerings. This lack of customer adoption could signal broader issues in the AI industry.

Investors are wary of Microsoft’s heavy spending on AI infrastructure, which is impacting the company’s cash flow. Microsoft’s stock trades at 25 times the average analyst estimate for 2026 earnings, reflecting uncertainty about the returns on its AI investments. The risk associated with its OpenAI contracts has made the stock less appealing to some investors, prompting caution in buying the dip.

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Read more at Nasdaq: The Math Behind Microsoft’s AI Boom Doesn’t Add Up–And Investors Are Finally Noticing