WW 969: The Hidden Sweatshop - Windows 11 Reaches 1 Billion Users!

Microsoft is burning through billions on AI, but Wall Street is finally demanding to see where the payoff is. The earnings announcement triggered a $357 billion valuation wipe-out, the largest in Microsoft's history and the second-largest in history overall (Nvidia managed to lose $593 billion in value in the wake of DeepSeek in early 2025).

Windows

• Windows 11 has over one billion users - and, surprise, it got their faster than Windows 10 without any of the shenanigans • Microsoft to address the quality issues in Windows 11 in 2026 • There is already evidence that Microsoft is trying to make Windows 11 suck less: Recent OneDrive changes that address a key ensh*ttification, and let's not forget all those security advances • What did Microsoft really promise? Not much • Microsoft has new EVPs for Security and Quality • Microsoft belatedly delivered the January Week D update last Thursday, a preview of this month's Patch Tuesday • Dev and Beta builds both deliver Mark Russinovich's sysmon tool

Microsoft earnings deep dive

• Microsoft reported a net income of $38.5 billion on revenues of $81.3 billion in the quarter ending December 31. Those figures represent gains of 60 percent and 17 percent, respectively, year-over-year • Earnings analysis: All eyes are on AI and no one is happy • Microsoft spent $37.5 billion on AI infrastructure (capex) in the quarter, up 66 percent YOY, and it's on track to spend $150+ billion in the fiscal year • Every single question was about this and how it will ever recoup the costs • There are now 15 million paid Microsoft 365 Copilot seats out of 450+ million Microsoft 365 seats • OpenAI is Microsoft's biggest Azure customer, but it's unclear if there is any real money there because of accounting tricks • Windows, Edge, and Bing all "gained share," PC maker revenues were up just 1 percent, the Windows 10 upgrade cycle was mostly a bust (it's likely that most of it was tied to RAM pricing fears, too) • Xbox fell off a cliff with content and services revenues down 5 percent in a holiday quarter somehow and Xbox hardware revenue declined an astonishing 32 percent YOY • Standalone Office 2025 suite was a surprise hit, Hood is curious if that continues • Microsoft 365 "cost of business" up 10 percent YOY because of AI costs • AMD revenues up 34 percent to $10.3 billion • Apple delivers record revenues of $143.8 billion; iPhone made more revenues by itself than all of Microsoft

AI

• Microsoft is going to basically make an app store for content makers who wish to be paid for use by AI • Anthropic advertises that Claude will be advertising-free, unlike ChatGPT • The next Firefox will include the promised AI kill switch and Vivaldi "extends the middle fingerˮ to AI

Xbox and games

• AMD reveals next Xbox console in 2027 • We're getting a solid collection of Xbox Game Pass titles for the beginning of February Battlefield • 6 was the best-selling shooter of 2025 and EA made $1.9 billion in Q4 • Epic Games has big plans for its PC launcher/store • Nintendo has now sold 17 million Switch 2s as OG Switch hits 155 million units

Tips and picks

• Tip of the week: Make OneDrive Folder Backup work for you • App pick of the week: Bitwarden (TWiT sponsor) • RunAs Radio this week: Getting Started using Purview with Erica Toelle • Brown liquor pick of the week: Glendronach Ode to

These show notes have been truncated due to length. For the full show notes, visit https://twit.tv/shows/windows-weekly/episodes/969 Hosts: Leo Laporte, Paul Thurrott, and Richard Campbell

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