Microsoft has lowered sales growth targets for its AI agent products after many salespeople missed their quotas in the fiscal year ending in June, according to a report Wednesday from The Information. The adjustment is reportedly unusual for Microsoft, and it comes after the company missed a number of ambitious sales goals for its AI offerings.

AI agents are specialized implementations of AI language models designed to perform multistep tasks autonomously rather than simply responding to single prompts. So-called “agentic” features have been central to Microsoft’s 2025 sales pitch: At its Build conference in May, the company declared that it has entered “the era of AI agents.”

The company has promised customers that agents could automate complex tasks, such as generating dashboards from sales data or writing customer reports. At its Ignite conference in November, Microsoft announced new features like Word, Excel, and PowerPoint agents in Microsoft 365 Copilot, along with tools for building and deploying agents through Azure AI Foundry and Copilot Studio. But as the year draws to a close, that promise has proven harder to deliver than the company expected.

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The shoe is most certainly on the other foot. On Monday, OpenAI CEO Sam Altman reportedly declared a “code red” at the company to improve ChatGPT, delaying advertising plans and other products in the process,  The Information reported based on a leaked internal memo. The move follows Google’s release of its Gemini 3 model last month, which has outperformed ChatGPT on some industry benchmark tests and sparked high-profile praise on social media.

In the memo, Altman wrote, “We are at a critical time for ChatGPT.” The company will push back work on advertising integration, AI agents for health and shopping, and a personal assistant feature called Pulse. Altman encouraged temporary team transfers and established daily calls for employees responsible for enhancing the chatbot.

The directive creates an odd symmetry with events from December 2022, when Google management declared its own “code red” internal emergency after ChatGPT launched and rapidly gained in popularity. At the time, Google CEO Sundar Pichai reassigned teams across the company to develop AI prototypes and products to compete with OpenAI’s chatbot. Now, three years later, the AI industry is in a very different place.

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