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Copilot Is Not Being Used — Yet the World's Resources Keep Being Drained
First, the enterprise market verdict is already in. Companies are choosing Anthropic's Claude (ARR exceeding $30 billion, adopted by 70% of Fortune 100 companies), while Microsoft Copilot's active usage rate sits at just 35.8%, with an NPS of -19.8 in deeply negative territory.
Second, due to the architectural computational limits of LLMs (the O(N²·d) constraint), hallucinations in complex business tasks are mathematically unavoidable. Microsoft's design posture of integrating this fundamentally flawed system into the deepest layers of Windows OS while making it nearly impossible to disable forces every industry — particularly healthcare and finance — to bear an unauditable compliance risk.
Third, this unrecoverable AI investment is destroying physical reality. As the February 2026 Iran war's blockade of the Strait of Hormuz triggers a naphtha crisis, life-sustaining resources for medical infrastructure, memory chips for consumer electronics (with abnormal DRAM price surges), and even local power grids are being relentlessly consumed to maintain underutilized AI data center infrastructure.
With Windows 10's end of support in October 2025, enterprises now face exponentially escalating ESU (Extended Security Updates) costs. Yet hardware refreshes force them to purchase needlessly high-spec systems (Copilot+ PCs) precisely when AI demand has driven memory prices to historic highs. And once they migrate to the new OS, they encounter AI surveillance and processing pathways that are extraordinarily difficult to opt out of and carry serious legal risks.
Corporate and government IT leaders, along with CISOs (Chief Information Security Officers), must clearly recognize that Microsoft's platform is no longer the neutral, stable infrastructure that supports business operations — it has transformed into "a high-maintenance, high-risk agent that drains corporate budgets without limit and threatens compliance and social responsibility."
Microsoft's progressive escalation of hardware requirements to align with AI integration has rendered PCs around the world "unusable."
The PCs progressively cut off
Copilot+ PCs require purchase, not upgrade
The reality users worldwide face with Windows 10's end of support
Where the discarded PCs go
Satya Nadella has implemented the following internally:
Furthermore, executives have implemented mass layoffs and reorganizations, justified by claims that AI integration has dramatically improved coding productivity. The "voluntary separation program" for U.S. employees functions as a mechanism to remove employees who cannot transition to AI-native roles.
In an organizational environment where the CEO himself proves "people are replaceable by AI" and uses this to justify workforce reductions, it is extremely difficult for frontline engineers and salespeople to report uncomfortable truths upward — such as "Copilot is not trusted by customers, and actual usage is low." The feedback loop from the bottom of the organization to the top has broken down, forming a rigid silo where plans are pushed forward in disconnect from reality.
The M365 Copilot app was auto-installed on Windows devices running Microsoft 365 desktop apps, without prompts or user consent.
Mozilla VP Linda Griffin publicly criticized Microsoft for installing the M365 Copilot app on Windows devices without user consent, and for placing a dedicated Copilot key on physical keyboards while making remapping difficult. She condemned this as "a textbook dark pattern that strips users of choice and prioritizes Microsoft's own interests."
Copilot was pinned to the Windows 11 taskbar by default. Plans are progressing to embed it directly into the most fundamental surfaces of the OS — the notification center, settings app, and File Explorer.
Microsoft has excluded the European Economic Area (EEA) from Copilot's auto-installation.
EEA gets exempted because of regulation. Everywhere else, it goes ahead. Users in Japan, the U.S., Asia, Latin America, and Africa are not protected by regulation. Microsoft itself recognizes this is not in users' interest and is legally problematic.
When IT administrators attempt to disable Copilot through Group Policy or registry settings, the system is deeply routed to maintain the AI processing pathway through Edge browser components, making complete opt-out structurally extremely difficult.
Healthcare IT administrators have testified that they had to completely disable Copilot via Group Policy. Patient information processing by AI cannot be permitted without explicit, documented consent and proper auditing. If they overlook the disabling, the hospital bears legal liability.
Financial institution compliance officers similarly worry that Copilot may analyze sensitive financial data or generate unauthorized communications. If a leak occurs, it is the financial institution — not Microsoft — that bears the responsibility.
The default-on integration of an AI processing pathway into industries where explicit consent and audit trails are legally required, without users' knowledge, fundamentally obscures the locus of legal liability. Local governments, hospitals, banks, schools — all are forced to bear the same risk.
Microsoft is concentrating global resources on building data centers. The scale is comparable to the annual budget of many mid-tier nations.
Microsoft's CapEx
Existing global footprint
Flagship project: Fairwater
Relationship with OpenAI/Stargate
$10 billion flowing into Japan as well (announced April 2026)
The Japanese government predicts a shortage of 3.26 million AI/robotics professionals by 2040, and has committed nationally to fully depending on Microsoft's technology ecosystem as the foundation for reskilling and social implementation.
Funding flows from the Middle East
Problems Nadella himself acknowledges
The nature of this build-out
This is not "hoarding" — not a deliberate market manipulation. Annual capital expenditure exceeding $100 billion creates a crowding-out effect through market purchasing power. Microsoft is simply the strongest buyer, and that fact alone is fundamentally distorting global supply chains.
Japan does not have the regulatory distance the EEA enjoys. As we will see below, the side effects of this build-out are directly hitting other industries and ordinary citizens worldwide.
In October 2025, OpenAI signed a letter of intent with Samsung and SK Hynix for approximately 40% of global DRAM (900,000 wafers per month). Although there is no legal obligation to purchase, both companies reallocated their production lines.
Microsoft is also finalizing a multi-trillion-won three-year DDR5 long-term contract with SK Hynix. Samsung, Google, and AMD have all moved to long-term contracts. Samsung and SK Hynix together account for approximately 78% of global DRAM.
More than half of global DRAM has been locked up for AI data centers.
For AI servers in data centers, HBM (High Bandwidth Memory) and large-capacity enterprise SSDs are essential. Semiconductor manufacturers (Samsung, SK Hynix, etc.) have shifted their production lines significantly toward AI in response to hyperscaler long-term contracts. This reallocation of supply capacity has caused extreme tightness in the supply of DRAM and NAND flash memory used in general consumer electronics.
Counterpoint Research's DRAM price tracking
| Period | Trend | | Q3 2025 | DRAM prices up 172% year-over-year | | Q4 2025 | Up ~50% quarter-over-quarter | | Q1 2026 | Further 40–50% increase | | Q2 2026 | Standard DRAM forecast: another 58–63% increase |
Specific price trajectory of 64GB RDIMM
NAND Flash similarly surging
Who is being hit
Counterpoint Research's summary:
Memory companies are telling smartphone makers to get in line behind the hyperscalers.
Japan's retail front line
How long will this last?
Memory factories cannot be built quickly. Electronics users worldwide will continue to bear the brunt of Microsoft's CapEx for another 2–3 years.
Of the 12–16 GW of data center capacity scheduled to come online in the U.S. in 2026, only about one-third is actually under construction. The rest is stalled awaiting electrical equipment delivery.
Industry analysis predicts that 30–50% of 2026 plans will slip beyond 2028. Microsoft is securing global resources for facilities that cannot be completed.
Data centers don't plug into wall outlets. Stepping high-voltage transmission lines down to usable voltage requires transformers weighing hundreds of tons.
Hyperscalers are reserving transformers 3–4 years before breaking ground. As a result, U.S. utilities are forced to defer their aging-transformer replacement programs. More than half of U.S. high-voltage distribution transformers are over 33 years old, near or past end-of-life. Outage risk is structurally increasing in communities worldwide.
Across all materials, data centers receive priority supply, while everything else gets pushed back.
The U.S. grid interconnection queue has swelled to over 2,100 GW — exceeding total U.S. transmission grid capacity. The grid interconnection process now takes 3–7 years.
New factories, new hospitals, new schools, new homes — all are queued behind data centers. Power availability constraints alone are extending construction timelines by 24–72 months in reported cases.
To secure power for data centers, Microsoft pivoted aggressively in 2026 toward direct large-scale investment in fossil fuel infrastructure. Climate progress has been substantially set back by a single tech giant.
In April 2026, Microsoft entered an exclusive agreement with energy giant Chevron and investment firm Engine No. 1 to jointly build a 2.5 GW massive natural gas power plant in the Permian Basin of West Texas — a deal worth $7 billion.
4 million U.S. households' worth of power, dedicated solely to one company's AI.
Microsoft has reported that its CO₂ emissions are already 23.4% above 2020 levels. The ambitious environmental pledge it had made — "achieve carbon negativity by 2030" — has effectively collapsed.
When the massive Texas gas plant comes fully online, this figure will certainly continue rising. According to Stand.earth Research Group's analysis, Microsoft proposed a combined 4.75 GW of new fossil fuel generation in just the first few months of 2026 alone.
Industry-wide context: According to Goldman Sachs' analysis, the explosive growth of AI is projected to drive a 160% increase in data center power demand by 2030.
At the end of 2024, data centers accounted for 5% of methane gas generation demand. By the end of 2025, this had jumped to 39% — roughly an 8-fold increase in one year.
Home heating, industrial boilers, electricity generation — all natural gas demands are now competing for the same pipelines as data centers.
Just as Microsoft committed to large-scale investment in natural gas power plants, the world entered an energy crisis. Microsoft's construction plans are colliding head-on with a war-driven supply shock.
On February 28, 2026, U.S. and Israeli coalition forces launched a massive air operation (codenamed "Operation Epic Fury") against Iranian military facilities and government command centers. The strike killed Iran's Supreme Leader Ali Khamenei and numerous high-ranking officials.
In retaliation, Iran launched thousands of missiles and drones against U.S. military bases throughout the Middle East and Israel, and effectively blockaded the Strait of Hormuz — the world's energy artery.
Cargo passing through the Strait of Hormuz:
The International Energy Agency (IEA) characterized this as "the largest supply shock in the history of the world oil market."
Households worldwide are paying more for electricity, fuel, and heating.
Natural gas power plants are designed assuming continuous fuel supply. Microsoft's $7 billion investment decision presumes a world of cheap, stable fossil fuels. That premise collapsed on February 28, 2026. Yet construction continues.
The Hormuz blockade hit not only crude oil and LNG but also naphtha. Naphtha is a basic petrochemical feedstock obtained through crude oil distillation — the starting point for plastics, synthetic fibers, pharmaceutical packaging, and semiconductor manufacturing. It has no substitute.
Catastrophic naphtha price surge
Japan, Korea, Malaysia — the extreme dependence on the Middle East
Production halts under force majeure declarations
The extreme shortage of naphtha has triggered an ultimate "triage (selective allocation of resources)" in global supply chains.
| Naphtha-derived end products in competition | Healthcare / general industry | AI / data center infrastructure |
|---|---|---|
| Polyvinyl chloride (PVC) | Dialysis circuits, blood tubing, IV bags | Data center cable insulation, large piping |
| Polyethylene (PE) | Syringes, sterile packaging, pharmaceutical containers | Fiber optic cable jackets, immersion cooling specialty piping |
| Polyurethane / specialty resins | Medical valves, clamps, catheters | Server chassis plastic parts, motherboard coatings |
As the National Kidney Foundation of Malaysia and others have warned, modern medical systems are completely dependent on disposable plastic medical devices — dialyzers, syringes, and the like.
Normally, market mechanisms ensure that materials needed for medical infrastructure are secured. But in the 2026 crisis, hyperscalers like Microsoft — with annual CapEx budgets exceeding $100 billion — moved to lock in upstream raw materials (PVC, PE, etc.) at any price for the cables and cooling equipment essential to their data centers under construction.
Medical device manufacturers and small packaging firms, with vastly inferior buying power, cannot pass the surging raw material costs to product prices and have been physically squeezed out of the procurement market.
The recognition that "dialysis patients are being sacrificed for an AI no one is using" is not a literary metaphor. It is an accurate description of the medical supply chain crunch unfolding across Asia in spring 2026.
99% of German packaging manufacturers are receiving price hikes, with only some able to pass the costs through (March 2026, German Plastics Processing Association survey). The risk of small and mid-sized manufacturer bankruptcies is rising worldwide.
All the harm described above exists for the sake of integrating Copilot into the foundation of society. Even though Copilot has been rejected by employees, lost user trust, and been defeated in market share, Nadella will not stop the integration.
But Copilot is not being used. Microsoft's own data shows this.
The largest structural challenge in Microsoft's AI rollout is the enormous gap between provisioned seat count and actual usage rate.
In other words, even when companies pay for Copilot licenses, two-thirds of their employees aren't using it.
Copilot's NPS (Net Promoter Score) for accuracy:
An NPS this deeply negative means users who tried it not only refuse to recommend it to colleagues — they actively warn others away.
In a survey of users who discontinued Copilot, 44.2% cited "distrust in answers" as the primary reason for stopping — a level of distrust strikingly higher than for competing AI tools.
The unparalleled distribution advantage of being default-integrated into the OS and Office applications has not translated at all into product trust or actual usage.
In the enterprise AI market, Microsoft is no longer the winner. Anthropic's Claude has taken control.
Anthropic vs. Microsoft Copilot, as of April 2026
| Financial / Adoption Metric | Anthropic (Claude) | Microsoft (Copilot Enterprise) |
|---|---|---|
| Annual recurring revenue (ARR) | Exceeded $30 billion | Not disclosed (estimated $1.5–2.5 billion from 15M seats) |
| Growth rate (last 15 months) | ~30x ($1B → $30B) | Stalled at 35.8% utilization |
| Fortune 100 adoption | 70% adopted as primary model | High deployment via Office bundle, but limited active use |
| Fortune 10 adoption | 8 out of 10 are customers | — |
| Developer NPS | 54 (Claude Code, January 2026) | -19.8 (general business use, January 2026) |
Anthropic's growth trajectory — fastest in enterprise software history
Claude Code's rise
In software development, Claude Code's surge is striking. Claude Code alone has reached ARR of $2.5 billion, growing into a tool used daily by 45% of professional software engineers.
In development environments, the "multi-tool stack" has settled in as the standard 2026 paradigm: using Claude Code or Cursor for high-reasoning tasks like autonomous agent functions, complex refactoring, and architecture design.
Examples of large-scale Claude deployments
Unrecoverable CapEx
Meanwhile, in the same AI market, Anthropic is achieving $30 billion ARR with a fraction of Microsoft's CapEx. The problem is not lack of demand for AI — it's that Microsoft's Copilot is not being chosen.
Gartner survey: Of Copilot pilot deployments, only 24% successfully scaled to 20%+ of employees. The remaining 76% are stuck in pilot.
Nadella has executed a massive integration strategy, pulling in employees, users, partners, and nation-states. But the substance of that strategy (Copilot) is a product not chosen by humans given a choice. 8 of the Fortune 10 and 70% of the Fortune 100 are choosing Claude.
The structure "enterprises are buying AI, but not buying Copilot" is in complete agreement with objective market data.
In July 2025, Varin Sikka and others at Stanford University posted a paper to arXiv.
Varin Sikka, Vishal Sikka, "Hallucination Stations: On Some Basic Limitations of Transformer-Based Language Models" (arXiv:2507.07505)
Vishal Sikka is the former CTO of SAP, former CEO of Infosys, and a board member at Oracle, BMW, and GSK.
The paper proves that hallucinations (the generation of plausible-sounding false information) by large language models (LLMs) are not merely products of insufficient training data or probabilistic errors — they are unavoidable physical and mathematical phenomena rooted in the "computational complexity mismatch" inherent to the Transformer architecture.
The paper's theorem:
The inference process (self-attention mechanism) used when a standard Transformer-based LLM generates text always operates under the strict fixed-budget constraint of O(N²·d) computational time, where N is input token count and d is vector dimension.
Yet many practical tasks enterprises ask LLMs to perform have computational complexity far exceeding this budget:
The moment a task's intrinsic computational complexity exceeds the model's reasoning ceiling of O(N²·d), it becomes physically impossible for the LLM to take the computational steps needed to perform the task correctly. But because LLMs have no mechanism to explicitly declare computational failure, they shift into a mode of blindly generating "the most probable next token" given the context.
The result is a confidently delivered wrong answer that is grammatically perfect but substantively shattered — a hallucination.
This cannot be overcome by scaling up. It is a ceiling inherent in the architecture.
For tasks beyond a certain complexity, Copilot will either fail or confidently produce wrong answers. Long-form Word editing, complex Excel aggregation, PowerPoint structuring, Outlook email summarization — all silently break down the moment complexity exceeds threshold.
Copilot does not announce that it has broken down. The essence is that failure and correct answers are externally indistinguishable.
The content Copilot generates is not verbatim-verified by humans. "Things I didn't write" and "things I can't explain" accumulate inside corporate documents, government documents, medical records, and financial records.
One day, an error in a residence record is discovered. A nonexistent transaction is found in a financial report. An incorrect prescription is found in a medical record. Whether it came through Copilot or human error — no one can tell.
The Sikka paper also points out the difficulty of verification in autonomously operating "agentic AI." Tasks where one AI verifies whether another AI's generated solution is correct often involve even higher computational complexity than generating the solution itself.
This means that even by combining multiple AI agents, it is fundamentally impossible to guarantee correctness on advanced tasks.
Despite the existence of these mathematically proven, unavoidable limits, Microsoft chose a strategy of integrating Copilot into the deepest parts of Windows 11 and Microsoft 365 — its OS and platform.
The biggest problem here is that when the system silently breaks down (exceeding computational limits and producing wrong answers), there is no mechanism to externally distinguish failure from success.
The Windows + Office + Copilot stack creates a state where AI processing pathways are constantly open from the deepest parts of the OS. In a system where you cannot tell what passed through AI, you cannot identify attacker intervention traces either.
For an AI that cannot be audited to be placed in default access to sensitive patient data or financial information at the OS level fundamentally obscures the locus of legal liability. The risks of AI-generated incorrect prescription summaries, financial reports containing fictitious transactions, accumulating inside systems — these are no longer theoretical concerns but cybersecurity vulnerabilities directly threatening real-world business infrastructure.
Local governments, hospitals, banks, schools — all critical infrastructure is in an unauditable state.
Against the speed of Mythos-class attacks, completely auditing AI processing pathways is impossible — for both outsourced and in-house IT departments. Legally and physically. Even when a breach occurs, the likelihood is high that no one will notice.
Even after being rejected by employees, distrusted by users, and defeated in market share, Nadella cannot stop Copilot integration. The reason is simple: the moment he stops, multiple premises collapse.
(1) The premise of stock price
Microsoft's market cap exceeds $3 trillion. This level rests on the narrative that "AI is the next growth driver." The moment Nadella admits "Copilot is not being adopted" or "we are reducing CapEx," the stock price will plummet.
The bulk of FY2026's $100–120 billion CapEx is being financed through stock issuance and debt. If the stock falls, financing costs spike, and data centers under construction cannot be completed.
(2) Strategic position with OpenAI
Although the exclusivity was relaxed in January 2025, Microsoft Azure remains the exclusive cloud for OpenAI's stateless API. As OpenAI builds its own infrastructure (Stargate), Microsoft must continue CapEx to maintain its position as "the cloud provider that has OpenAI."
(3) Long-term contract lock-in
In 2026, Microsoft has signed a multi-trillion-won three-year DDR5 contract with SK Hynix, a $7 billion natural gas contract with Chevron, a long-term DRAM contract with Samsung, and a $100 billion fund with BlackRock + MGX. These contracts impose payment obligations whether Copilot succeeds or fails. Stopping mid-stream locks in losses.
(4) Sovereign AI integration into national security
The $10 billion contract with Japan (2026–2029) is not merely data center expansion. It is the core of a national project — collaborating deeply with domestic telecom and cloud providers like SoftBank and Sakura Internet — to build "Sovereign AI" infrastructure keeping data within Japan.
It is fully aligned with METI's multi-trillion-yen AI investment strategy and includes close cybersecurity collaboration with the National Police Agency and the Cabinet Secretariat. The same applies to Saudi Arabia's Sovereign Cloud, the linkage with UAE capital (MGX), and U.S. police's Copilot partnerships.
Microsoft is no longer simply a corporation — it is entangled in treaty-like relationships with multiple nations on national security matters. Mid-stream withdrawal would mean breaking those relationships.
(5) Forced hardware refresh cycle
Combining the Copilot+ PC requirements (40 TOPS NPU, 16GB DDR5, 256GB SSD) with Windows 10's end of support has pushed a substantial portion of the world's Windows users into purchasing new PCs. If Copilot integration stops, the justification for that forced purchase collapses. The 2026 sales plans of Dell, HP, Lenovo, Acer, ASUS, and other PC makers collapse with it.
(6) Nadella's personal record
Nadella has been celebrated for transforming Microsoft into a cloud and AI company since becoming CEO in 2014. Copilot is his largest strategic bet. Withdrawing here turns the verdict on his entire CEO tenure into "failure."
Because he cannot stop, the enforcement deepens. To keep performing the growth narrative as "the leading AI company" and to keep the massive financing flowing, the alternative is not just stock collapse but the collapse of treaty-like relationships with multiple nations on security matters. The result is a self-destructive negative loop in which unwanted investment and OS feature integration accelerate further.
And simultaneously, the world's memory, electricity, copper, helium, bromine, and naphtha continue to be consumed for the sake of running an unsold Copilot.
Hospitals can no longer secure dialysis equipment packaging materials. Auto plants face component supply disruptions. Semiconductor plants run on rationed helium. Households pay more for electricity. Smartphones and PCs get more expensive. Climate progress reverses. Small and mid-sized manufacturers go under.
What happens to a Microsoft whose CEO cannot be stopped — Nadella will keep going until he is forcibly stopped. This is a pattern humanity has repeated.
Because Microsoft was such a large and excellent company, the harm already being scattered worldwide is immeasurable. From here, that harm will accelerate.
Will you continue using Windows and Office anyway?
You will suffer through PC replacements, Office subscription price hikes, and rising cybersecurity defense costs.
Microsoft's platform is no longer the neutral, stable infrastructure that supports business operations. It has transformed into "a high-maintenance, high-risk agent that drains budgets without limit and threatens compliance and social responsibility."
A staged migration to open-source operating systems (Linux and others) for desktop environments, de-Microsoftization of office suites, and limited, verifiable adoption of AI through APIs from independent vendors (such as Anthropic) — these are the most reliable, rational technology strategies for protecting an organization's self-determination and budget from this complex global crisis.
Migrate to Linux as soon as possible.
Learning Linux with Claude is not difficult.
For practical guidance, see the companion article "Learning Debian with Claude."
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