Microsoft Investor Sues Over AI Expenditures, Copilot Struggles

Microsoft Corp. overhyped its artificial intelligence developments and chatbot Copilot while downplaying concerns about its AI investments and dealings with providers like OpenAI, a proposed class action said.

The software giant’s misrepresentations that it was well positioned to gain on its AI investments drove up its stock price, a pension fund told the US District Court for the Western District of Washington.

Microsoft released disappointing financial results for its second fiscal quarter of 2026 on Jan. 28, revealing its Azure cloud service’s growth slowed due to computational capacity holdbacks, said the pension fund’s complaint filed June 12. Capital expenditures for ...