# Microsoft's $2.5B AI Consulting Strategy Flaw

**Podcast:** The AI Engineer Podcast
**Published:** 2026-07-10

## Transcript

I host two other podcasts.
One is called AI Hustle.
It's about growing and scaling your business with AI tools.
And one is called AI Applied, about using AI in your career.
Every once in a while, I play an excerpt of one of those podcasts on this show to give you an idea of what it's like.
I'm going to play an excerpt from today's episode of AI Applied.
We're talking about Microsoft's $2.5 billion AI bet.
I hope you like it.
And if you enjoy this episode, go check out the AI Applied podcast anywhere that you get your podcast.
It's AI Applied.
Microsoft has just committed $2.5 billion and 6,000 employees to a new AI implementation unit.
Now, this is not new.
They're not the only ones that have done this.
They're following what OpenAI and Anthropic both have made partnerships with different organizations, Accenture and Deloitte, if I'm remembering correctly.
And I mean, there's a bunch of players that have been doing this, a bunch of private equity firms that have been kind of getting in on this and kind of investing money into these sort of AI implementation units.
Connor has a spicy take on this that I was reading on LinkedIn.
I was like, Connor, we got to talk about what you've been saying.
This post has been blown up and I think it's making some people mad, but I see a lot of truth to this.
So and basically his take is that maybe what Microsoft is doing is not the right way to do this, which is, you know, shocker, especially when this is $2.5 billion that are about to be spent on this.
So Connor, I'd love for you to maybe explain a little bit about what these implementation units are hoping to achieve.
what you think they will achieve, what you think people should do, and if this is all a giant $2 billion mistake.
Total billion-dollar mistake, everybody.
Yeah, I love the hot take here, man.
So, by the way, I did have people from Microsoft writing to me and being like, it's not really 2.5.
It's sort of like that's kind of like reallocated, but the message is the same.
And even people inside Microsoft are like, yeah, you know, the headline, don't really love the headline.
But essentially, like, you know, the headline is essentially, let me grab it.
It's from the information originally.
if you don't know the information, but it's expensive to apply to subscribe to, but it's worth it.
Microsoft commits $2.5 billion to new applied AI consulting effort and then says the new unit comes as large companies, and this is important, the new unit comes as large companies have groused that it can be tricky to configure AI software to their own needs and generate meaningful returns.
Jayden, I'll tell you why I am up in arms about this.
So it reminds me, so we're working with the big, so AI Mindset like works with big companies to sort of like...
transform from a behavioral standpoint, right?
Organizations to really transform AI adoption.
And I remember working with this huge, like oil and gas or energy, energy company, sorry.
And we were kind of like talking about all this in this, doing this big senior leadership workshop, which we do there, like, you know, three and a half hours long or something like that.
And at the end, these folks were talking about when they did like their SAP enterprise transformation thing.
And they're like, yeah.
And remember how we had to keep on.
tweaking it because people just weren't really satisfied with it and all that kind of stuff.
And I kind of paused the conversation.
I didn't really want to get involved because it was a conversation kind of among them.
But I was like, can I just point something out?
Has this happened before?
And they're like, yeah, it happens all the time.
I'm like, this is what we think about all the time.
Every time you sort of like have a new system.
Jayden, a digital transformation takes place.
Hey, we're now going to use Salesforce.
What happens?
I promise you, everybody complains because people like the old system.
So what do they do?
They blame the system instead of how they work.
And so when Microsoft sees this, and I'm telling you, this is what happens.
It's not just Microsoft.
I mean, it's every big LAI lab.
It's Google.
It's Anthropic.
It's OpenAI.
It's all of these labs.
And I'm telling you, this is what happened.
They put out a pilot of like, you know, 5,000 to a 50,000 person company.
And what they say is everybody's going to use this and then it's going to catch like wildfire.
And then we're going to sell our licenses to the other 50,000.
What happens?
A fraction of those people use it.
It's just truth.
Right.
And the whole point is that.
they are now getting feedback because they're like, well, what's happening?
Why aren't people using it?
They're like, oh, I don't know.
I just don't like the features or something.
And they complain about the thing, which Jaden, I'm going to sound like a broken record here.
But like, it's like complaining about the treadmill.
It's like, you know what?
I don't know.
It's just sort of like it's downstairs or like I have to do laundry or like the features.
I don't know.
The problem is not the treadmill.
The problem is you.
Right.
And why?
Because we're just we don't like change.
We don't like new systems, all that kind of stuff.
And everybody who's sitting there listening to the sound of my voice and being like.
That's not true.
AI is great.
It's just people have to be more curious and they have to define their use cases.
And I'm like, you've tried that, right?
Has anybody responded to that in the same way?
Has anybody responded when you've shouted, eat less and exercise to them?
It doesn't work that way.
So when Microsoft is putting all of this effort.
And I understand that there's nuances to this.
It's not exactly like they took a pot of $2.5 billion and 6,000 people aren't putting it to this.
But what they're doing here, and I love Microsoft.
I really do.
I'm actually one of these people that I'm like a huge Microsoft fan.
But I keep telling them, like, you're the adult in the room here.
Like, you own enterprise.
Why focus on it like this where you're like, yeah, let's come in and help you, like, tweak the systems and work on the features.
That's not the problem.
The problem is that what they actually need the McKinsey's for and the BCG's and everybody else's is how to get people to sort of, like, transform how they work.
But even that doesn't work.
Jaden, I promise I'm going to shut up after this.
But even that doesn't work because the consulting model doesn't work.
Why is that?
Because.
When the big consulting firms, the McKinsey's, the BCG's, the Bain's, the Deloitte's, EY's, et cetera, when they go in, what they are great at is they are great at looking at a system of like, hey, you guys do sales this way.
Well, we know that from doing sales in a million other companies, the best way is to do this way, so do it like that.
Or you do operations this way, the best way is to actually do it like this, so change what you do.
That's fine.
That's great.
That's called consulting.
But coaching is very different.
You can't just say to people, hey, be nicer to each other.
Or hey, think differently.
Or hey, be more collaborative.
That doesn't come from best practices from other organizations.
You have to get people to change their habits and behaviors and everything else.
Which is why, sorry, now I've brought it all the way back, Jaden.
Microsoft is trying to solve the easy problem.
And corporations are trying to solve the easy problem of like, oh, well, let's just tweak the system.
When the problem is not the treadmill.
The problem is.
You just don't want to get on that treadmill.
That's where I wish Microsoft would put $2.5 billion on helping people to rethink how they work and rethink processes.
I just think it's a big miss.
A hundred percent.
I mean, if you're going into an organization and you're like, hey, everyone, you've got to try the new Microsoft Copilot.
We're signing it up on everyone's computers.
These are all the 10 things we recommend doing.
We're going to go on all hands every morning and share our favorite Microsoft Copilot-like tip.
I mean, that's not how they're implementing this in reality, but like, let's think about it, right?
Or we get the engineers in there and we're looking at the workflows and we're trying to like get the Microsoft work, you know, work copiler tools like embedded into the workflows and everything.
That's not how you, that's not how you drive the big change.
The big change comes from individual people getting a spark and realizing, oh my gosh, look how capable this is.
Look how much time I can buy back for myself personally to work on the parts of my job that I like doing.
automate the repetitive mundane parts.
Like as soon as someone gets that spark, you don't need to spend $2.5 billion to convince them to use it.
They're obsessed with it.
I mean, most of you guys listening to this podcast are in that ballpark, right?
Like you see something incredible that it can do and you want to go all in and figure out all of the ways.
And even myself who covers AI all day, every single day, there's so many ways that I discover every day.
I'm like, oh my gosh, I never even thought of that.
That's so cool.
I want to try it out, right?
This is what drives the adoption is people being genuinely excited because they catch that spark and you have to ignite that spark for people.
And you're not going to do it by just going and telling everyone to go download Copilot onto your computer and make sure to go ask it, you know, what time the Yankees are playing at XYZ, some simple little thing, right?
Like you really got to get them to actually get a spark with it.
So that's one thing.
And the other thing that I think for me is just.
I mean, it's just so much money that could be spent in so many other places.
I know you said Microsoft was like, oh, it's not really 2.5 billion.
I mean, it's just kind of the way the presser goes out or whatever.
But I just think that there's a lot of ways.
In your opinion, Connor, from a lot of the consulting that you've done with organizations, what's the best way for people to help others in the organization catch that spark?
Yeah, I love that you call it the spark.
So the thing that we figured out, I think, in this whole thing is the reason why we don't teach use cases.
And we teach process instead is that use case is just encouragement.
Come on, guys, find your use cases.
Again, it's sort of like, come on, guys.
Don't you want to feel better?
Like, get out there and run.
Like, that doesn't work.
You have to put processes in place.
So for some people, you know, we do it through this whole behavioral thing, which actually drives a lot of spark because people like, oh, I didn't think of it like that.
It's actually like this and not like that.
So that gets a lot of people kind of like with that spark.
But we can't get everybody.
We just can't.
So then the people that we don't get, we have to put a process in place.
Right.
So the two.
Let me.
attack those two sides, right?
So first of all, Gene, I totally agree on the spark.
The only thing that drives AI adoption, it's one, first of all, it has to be driven at the individual level, unless you're talking about AI in a product, right?
Like, like Gene's AI box, right?
Like that's, your product keeps getting better and better and better because of AI, right?
Like, I mean, and that's, that's awesome.
But for individuals at a company, when you're trying to drive value, it has to happen at the individual level because you're paying people to drive value for your...
company.
You don't have like some people and some robots.
It's all people.
So what do you do in that case?
You want to have everybody have their spark.
And the problem with the spark is that it often happens outside the scope of work.
Anybody listening probably has had that spark, as you said, right?
I want to know like how many of you.
have found that spark in a personal thing versus a work thing?
Because I find it's often impersonal, right?
You're like, oh my gosh, I spilled coffee on this and I don't, and all of a sudden chat GPT gets you out of a bind.
You're like, oh my gosh.
It doesn't usually come because somebody discovered how to write an email faster.
Who's that like being like, the genie has come out of the bottle, right?
No, it's like, it's not exciting.
It doesn't get you sort of like wanting to stay up all night, like just working with AI.
It doesn't get those things.
So then how do you drive that if you, if.
if you sort of like, if people just aren't finding that spark, right?
So again, like in our training, like we get a lot of people, but we don't get everybody.
So the people we don't get, we have to have like the people leaders in those organizations, put processes in place, like meetings, things like that, where AI is integrated.
And we have specific ways of doing this, but like where AI, you can't get to the end of the day without going through AI in some way, because then it's sort of like forcing people.
It's almost like, hey, listen guys, to start the day at this company, we're all going to go out on a two mile walk or whatever.
At some point, you're going to get more and more people who are like, you know what?
I actually like I'm really glad I'm doing this.
You know what I mean?
Like you force it in that kind of way of forcing mechanism because then they will find their spark through that.
But that's why we don't do use cases because use cases are just like, come on, everybody just find your thing.
And you're kind of encouraging X.
So we say moving from encouragement to expectation of use.
Expectation of use is.
listen, all our meetings are on the third floor and the elevator doesn't work anymore.
That's how you get people healthier.
Do you know what I mean?
Like you're just saying like people have to go through a process.
So that's how we've had success on that.
And I just wish, again, Microsoft, to my friends at Microsoft, you are the adult in the room here.
Like you are able to do this.
Like you own enterprise.
I mean, obviously, so does, you know, so does IBM.
So does, you know, Google.
So does, you know, SAP.
So does Salesforce.
A lot of these places do.
So I'm kind of speaking to them as well.
But if you focus on how you get people to change their processes rather than the tool itself, then they're going to buy your product at scale because they'll have that spark.
That's what gets me probably, as you can see, overly excited.
But that's how we think about it.
Yeah.
And I mean, the last thing that I'll say is there also is an issue in a lot of organizations where I feel like the companies.
themselves are not doing enough.
And like you mentioned, that forcing function is so important, because I feel like the companies themselves are not doing enough to encourage or push people.
Maybe they had early like fans on AI, maybe they just never encouraged it, maybe they never rewarded it.
And I mean, there's all sorts of absolutely ridiculous reward systems, like who's using the most tokens, okay, terrible ideas, but but like genuinely getting people to leverage these tools, because the things I'm seeing a couple different things.
Number one, a lot of the software companies I use and the scrappier, savvier startups.
they are churning out new features every two weeks because they just can.
And it's like, it's actually blowing my mind.
There's a bunch of companies I've followed for a long time.
And the rate that they're able to just put out these incredible features or rebuild their entire platform is so impressive to me.
And I understand why, because I'm doing the same thing with all my software and platforms and tools, but I'm not seeing it from all companies.
And the companies that I'm not seeing it from, for example, I mean, there's just so many people where you realize that we are sort of in a bubble.
There's some people that are really taking advantage and there's some that are just not.
I was recently talking to someone and he's a developer at like a big gaming studio.
And he said, I'm like, I'm like, oh my gosh, like he's a front end developer.
I'm like, you must just like Clyde must be your best friend, right?
It's like so awesome because I'm doing this all day, right?
And he's like, to be honest, like, I don't know if I've tried the Clyde one yet.
Like, I think I tried, we had like a GitHub one, but then it's, we don't have it anymore.
And like, I've started using it a little bit lately, but anyways, it just blew my mind how much he didn't use it.
And I'm like, If it's not a priority in your company, it's not a priority for your employees.
And if it's not a priority for your employees, you're not shipping new updates every two weeks because you can.
You're not 10xing your output because you can with AI.
And so, yes, there's business as usual.
And some companies are in these industries where you're kind of entrenched.
You kind of have a good thing going.
And business as usual works pretty good.
I mean, if you really want to stay competitive, you have to make this a priority.
I know I'm speaking to the choir here, but it blows my mind because it probably happens at least once a week where I talk to someone and they're like not using AI.
This is the bubble we live in.
It's the bubble we live in.
Just to close that out, like just remember, guys, like two things.
First of all, we live in a bubble that anybody listening to this show lives in the bubble.
A lot of people are not.
Excuse me.
I'm not getting emotional.
I'm just going to take a sip of water.
Connor is incredibly emotional about this point.
And people just aren't using AI enough.
I was watching England, Mexico the other night and Harry Kane lost his voice.
I'm like, how embarrassing is that?
And he had a much bigger audience.
So I think I'm okay.
Jane, the thing is like, this has to start with leadership.
It has to sort of like start with leadership and work its way down.
Just as you're saying, there's literally no way for a company to sort of like hold people accountable unless leadership is holding people accountable.
That's where that has to start.
But again, We have to understand that like just telling people to use it is just never going to work.
Guys, before I lose my voice again, like again, if anybody saw Mexico, England, they know this, the Harry Kane interview was glorious.
He lost his voice.
He sounded like Kermit the Frog.
Luckily, I think I've rescued myself.
But here is the thing, guys.
If you are sort of like trying to push yourself and trying to sort of like see how you can use this better, I cannot recommend more highly.
Jaden's AI box dot AI.
This is my absolute favorite thing to use because when I'm bouncing between claw, Gemini, OpenAI, those are my kind of like big three.
This allows you to do that for less than 10 bucks a month.
It's absolutely unbelievable.
Use all these models, help, you know, compare things.
This is what I'm doing and spending hundreds of dollars a month.
Check this out if you haven't already.
It is unbelievably worth it.
You won't regret it.
And don't forget to leave a rating and review.
We are so grateful for these conversations with you all, and we will see you in the next episode.