By Marcus Law
Publication Date: 2026-10-29 10:51:00
For two years, investors and IT buyers have asked Microsoft the same thing about Copilot: are people paying for it, and are they using it? For the past three quarters the answer has come with a number attached. This quarter it didn’t.
Microsoft’s first-quarter fiscal 2027 results, for the three months to September 30, were strong. Revenue rose 19% to $92.3 billion and Microsoft Cloud revenue grew 30% to $63.9 billion. Yet the figure that has become the industry’s barometer for workplace AI, paid Microsoft 365 Copilot seats, was missing from both the release and the call. In its place came usage growth, consumption credits and a new top-tier license.
That is more than a change in what Microsoft reports. The company is moving the measure of its AI business from seats to usage, and the way it bills customers is moving with it. For buyers, that means an AI bill that is harder to forecast. Yet the same results suggest customers have more leverage at renewal than the headline growth…