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TIP813: Microsoft (MSFT): Is Microsoft a Misunderstood AI Opportunity? w/ Daniel Mahncke & Shawn O’Malley

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May 7, 2026
A deep dive into Microsoft's AI crossroads and whether its software franchises are at risk. Discussion of LinkedIn, Azure cloud growth, gaming strategy and the Activision play. Examination of Office's per-seat economics and how AI could disrupt productivity tools. Analysis of the OpenAI relationship, capex for GPUs, and scenarios for who captures AI value.
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ANECDOTE

LinkedIn Turned $25B Buy Into A Valuable B2B Asset

  • Daniel and Shawn recount LinkedIn’s surprising returns after the $25B acquisition: it now earns ~ $18B revenue and nearly a billion members.
  • LinkedIn monetizes via expensive recruiter seats, high-CPM B2B ads, and premium subscriptions, proving the buy was effective.
INSIGHT

Users Prefer Generalist LLMs Over Copilot Today

  • Generalist LLMs like Claude currently produce better outputs inside workflows than Copilot, partly due to easier access to external contexts and templates.
  • That explains user preference to start in Claude then paste outputs into Word/PowerPoint rather than use Copilot directly.
INSIGHT

Copilot Could Save Office If Microsoft Executes

  • Copilot adoption is nascent (3.3% of customers) but bundling across Microsoft products could scale it and preserve Office economics if execution improves.
  • Execution gaps (model quality, data access, governance) currently limit Copilot's value capture.
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