On Microsoft’s earnings call last month, CEO Satya Nadella boasted about the company’s artificial intelligence products, and said over 150 million people are using its Copilot assistant for productivity, cybersecurity, coding and other endeavors.

But conversations with IT buyers at Microsoft’s Ignite conference in San Francisco this week highlighted some of the hurdles the company must overcome as it tries to sell its AI chatbot in the enterprise market.

“I know a lot of customers who are like, ‘Yeah, I want 300 to go to zero,'” said Adam Mansfield of consulting firm UpperEdge, referring to Copilot licenses. Mansfield, who helps companies negotiate Microsoft deals, said those clients are saying, “I don’t even want it.”

Microsoft started selling the commercial version of 365 Copilot two years ago for $30 per person per month, as an add-on to its broader productivity suite. The chatbot can answer a user’s questions based on information stored in corporate systems and can run alongside Microsoft apps, summarizing email threads, creating formatted presentations and capturing key points from calls.

Microsoft is competing in AI on multiple fronts, with its heftiest investment coming out of its Azure cloud infrastructure business. Alongside a $13 billion bet on OpenAI, Microsoft is the AI startup’s key cloud provider. In October OpenAI announced a $250 billion commitment.

Microsoft said revenue growth at Azure reached 40% in the latest quarter, topping the growth rate at Amazon Web Services and Google’s cloud business.

AI agents present a different challenge. Instead of paying for the infrastructure needed to run hefty workloads, customers are buying a new tool for their employees, and the return on that investment isn’t yet clear, according to a number of clients and consultants interviewed by CNBC.

Adobe, Google, Salesforce, Workday and other vendors are also trying to sell agents to corporations, schools and governments, creating a crowded market for a still nascent technology. OpenAI and Anthropic not only have popular AI models but are increasingly catering to businesses with new services as well.

Eon, a Sequoia-backed cloud backup startup, runs its software in Azure. CEO Ofir Ehrlich said MIcrosoft has broadened Azure’s appeal for software developers and operations specialists. But the company isn’t standardizing on Microsoft’s AI software. It relies on AI coding tools from startups Cognition and Cursor and multiple AI assistants, said Ehrlich, who previously sold startup CloudEndure to Amazon.

Google’s Gemini has been making rapid advancements in the market. This week, the company debuted its latest model, Gemini 3, which it says will deliver better answers to more complex questions.

“We just had a massive 16,000-employee company move all their mail to back to Google so they can leverage more Gemini,” said Julian Hamood, founder of Microsoft partner TrustedTech.

Microsoft declined to comment.

Starting in December, a Microsoft 365 Copilot Business tier will become available at $21 per person per month for organizations with up to 300 end users, the company announced at Ignite this week.

It’s not all doom and gloom for Copilot, as Microsoft still has an advantage with its expansive user base.

Nadella said on the latest earnings call that “more than 90% of the Fortune 500 now use Microsoft 365 Copilot,” though he didn’t provide an average number of users at those companies. He named five companies and a U.K. government department that each bought over 15,000 seats in the quarter, adding that most enterprise clients continued to come back for more.

This year, butter maker Land O’Lakes rolled out Microsoft 365 Copilot to all of its nearly 5,000 knowledge workers, after initially granting access to about 20% of them. A small number of employees also have Gemini subscriptions.

Land O’Lakes has long relied on Microsoft software and now runs over 70% of its infrastructure in Azure, said Teddy Bekele, the company’s technology chief, in an interview at Ignite.

Software engineers at Land O’Lakes relied on the GitHub Copilot AI automated programming software to build custom project and portfolio management software, Bekele said, adding that the company stopped paying for an off-the-shelf product.

Now Land O’Lakes is testing Oz, an assistant for retail agronomists who advise farmers. The company developed it with Microsoft Foundry software. Oz can save Land O’Lakes money as it replaces older applications, Bekele said.

At Ignite, Pearson announced Communication Coach, an agent that will provide personalized learning recommendations through Copilot based on Teams calls, with help from OpenAI’s GPT-4o mini model.

“Microsoft is dominant in the enterprise,” Treat said. “It was a natural choice if we’re thinking about how to train people in communication in the workplace.”

Microsoft is also adding more models into the fold. On Tuesday, Microsoft said Anthropic is bringing its Claude Haiku 4.5, Opus 4.1 and Sonnet 4.5 to Microsoft Foundry. Anthropic committed to spend $30 billion on Azure.

“Before today, we didn’t have access to all the models from Anthropic,” Treat said. “Now we do. That’s a big improvement.”

Still, Mansfield said competition has intensified this year, and some companies have been more seriously evaluating alternatives to Microsoft’s AI products.

“Microsoft is trying to catch up, quite honestly,” Mansfield said. “That’s not what a monopoly typically has to do. They’re not comfortable. Their sales reps actually now have to learn to sell.”

According to Microsoft, the technology is getting more traction internally.

Around 70% of commercial sales, support and partner services workers now use Microsoft 365 Copilot daily, up from 20% a year ago, said Pam Maynard, the company’s chief AI transformation officer.

“We’ve got the 30% daily active usage to get after,” Maynard said in an interview. “I do believe we’ll get there, and it’s just part of change management and helping people to develop that habit.”

WATCH: Microsoft CEO of commercial business on Anthropic, Nvidia partnership

Three years since the arrival of OpenAI‘s ChatGPT, more devices featuring generative AI technology have hit the market in time for the 2025 holiday shopping season, with many offering deals for Black Friday.

Shoppers can pick from more advanced smart glasses, smart speakers with genAI and a pendant AI friend that acts as a confidant.

These latest gizmos come from megacaps like Amazon, Alphabet and Meta and smaller players like Friend and Plaud.

Despite the arrival of this new wave of products, reviews for many of the devices are mixed, and nothing has separated itself as a clear leader of the pack.

That’s in part because much of the spending on artificial intelligence has been focused on other things.

Since ChatGPT was released in late 2022, the bulk of the tech industry has reoriented itself to prioritize building out large language models in a race to reach artificial general intelligence, or AI with the capabilities that are on par with, or surpass, humans.

Thus far, much of the development in Silicon Valley has focused on AI apps, including chatbots like Anthropic’s Claude, image generators like Google’s Nano Banana or feeds for AI-generated short-form videos like OpenAI’s Sora. All things people can access on their existing smartphones without a spiffy new gadget.

But the world of AI hardware is growing fast.

If you’re in the market for the latest AI devices, here’s what’s available to snag this holiday season.

The company unveiled Alexa+ in February, promising a smarter, more conversational and personalized version of its 11-year-old digital assistant. In September, it followed up with a new set of Echo speakers and displays, which are the first devices to come with Alexa+ out of the box. 

The lineup includes a $100 Echo Dot Max, $180 Echo Show, $220 Echo Studio and $220 Echo Show 11.

The Echo Dot Max is an entry-level, all-purpose smart speaker, while the Echo Studio is larger, pricier and offers better sound quality. The main difference between Amazon’s smart displays, the Echo Show 8 and Echo Show 11, is the touchscreen size.  

All of the devices have improved sensors, speakers and microphones.

Amazon is offering 11% off the cost of the Echo Show 11 and 10% off the Echo Dot Max as part of its Black Friday promotions.

With the upgrades, Amazon is aiming to have users engage more often with the devices than their predecessors. Consumers frequently complained that Alexa had grown outdated while the Echo devices offered little utility beyond setting timers, spouting weather forecasts, playing music and controlling smart home accessories, like turning lights on and off. 

Amazon’s recent Alexa ad tries to paint a different picture. 

Comedian Pete Davidson strolls through his kitchen when an Alexa-equipped Echo Show announces, unprompted, that the “Coffee’s on, and your Uber is on its way.” Davidson then casually banters back and forth with Alexa about his preferred nickname. 

The interaction is meant to showcase a few of Alexa+’s biggest selling points — users don’t have to repeat a so-called “wake word” after every command, allowing the conversation to flow more naturally.

The devices can also now connect to external services to take actions on users’ behalf. As of now, Alexa+ can book an Uber or OpenTable reservation, generate a song via Suno, plan a trip through Fodor’s, schedule a repairman visit and purchase concert tickets through Ticketmaster. Amazon has said it expects to add more capabilities soon.

Alexa+ isn’t yet available to the general public. Consumers have to wait to receive Early Access or purchase a new Echo model to use it. 

Amazon is offering Alexa+ for free to users with Early Access, but at some point, the company will begin charging non-Prime members $19.99 a month for the service.

The company is also making moves in wearables.

Amazon in July announced plans to acquire AI company Bee for an undisclosed amount, indicating that it could have more hardware infused with the technology in the works. Bee is known for its $50 wristband that uses AI and microphones to listen to and analyze conversations, then provide to-do lists, summaries and reminders for everyday tasks.

— Annie Palmer

Although the Gemini-powered Google Home Speaker won’t roll out until the spring, Alphabet did deliver some generative AI tech this year.

Launched in August, the Pixel 10 smartphones thoroughly integrate Google’s AI into several features, such as live translation, text-based photo editing and the built-in Gemini assistant.

The baseline Pixel 10 starts at $799, while the Pro lineup includes the $999 Pixel 10 Pro, the $1,199 Pixel Pro XL and the $1,799 Pixel 10 Pro Fold. The Pro line offers a higher quality camera and display, as well as additional video features.

Among the AI products is “Magic Cue,” which connects data across different apps to surface relevant information and suggest helpful actions. For example, if a user receives a message asking about a dinner reservation’s location, Magic Cue can find the answer from the calendar app.

For snapping pictures, Google provides an AI “Camera Coach,” which scans the scene of a photo and offers recommendations about framing, lighting and other techniques to improve the image.

The Pixel 10 Pro phones come with a one-year subscription to Google’s “AI Pro” plan, which typically costs $19 per month and offers multiple AI tools, including writing assistant NotebookLM and video generator Veo 3.

All the Pixel 10 models are currently on sale for $200 to $300 off until Dec. 6, except for the Pixel 10 Pro Fold, which has a $300 markdown until Dec. 2, the company said.

— Jaures Yip

Meta’s partnership with eyewear giant EssilorLuxottica, originally inked in 2019, has spawned a surprise hit in the Ray-Ban Meta smart glasses that both companies are keen to boast about.

With the Meta AI digital assistant, users can command the camera-equipped glasses to take photos, play tunes and to answer questions about nearby landmarks.

In September, the two companies debuted the latest version of the glasses, dubbed Ray-Ban Meta (Gen 2).

The new model has double the battery life of its predecessor and an improved camera. It costs $379, which is $80 than the prior version.

Meta and Luxottica this year also launched two smart glasses aimed at athletes under the Oakley brand.

The $399 Oakley Meta HSTN glasses are pitched toward casual athletes who want to take photos while playing sports like golf, while the $499 Oakley Meta Vanguard smart glasses are geared toward the action-sports crowd, like skiers.

The Vanguard glasses feature a flashier wraparound design and two buttons on the frames’ underside that lets helmet-wearing athletes easily take photos and videos and perform other actions.

For those willing to spend big money and test new technology, Meta and Luxottica also rolled out the $799 Meta Ray-Ban Display glasses in September.

They are the first glasses Meta sells to the public that include a display, albeit a small one, in just one of the lenses. The display is intended to show users small bits of information, like navigation directions. The glasses also include a wristband that utilizes neural technology so users can command the device with gestures like rotating one’s fingers to adjust volume.

Buying the $799 glasses, though, is not easy.

Meta requires that people sign-up for in-person demos at stores like Best Buy and LensCrafters before buying the product, and the company warns that “availability varies by store, so you may not be able to purchase a pair immediately after your demo.”

Early reviews for the display glasses have been mixed.

Some reviewers have praised the device’s color display, camera and innovative wristband. Still, others have criticized its high price and have said its lack of apps limit functionality.

Meta is currently offering a few Black Friday and Cyber Monday deals for some of its various AI-powered smart glasses that will last until Dec. 1.

People can save 20% on all versions of the Ray-Ban Meta (Gen 1) at Best Buy, Target, Amazon and also at Meta’s website and the Ray-Ban website and stores. Meta is also offering 20% off the cost of prescription lenses for people who buy the Ray-Ban Meta (Gen 2) and Oakley Meta HSTN glasses from its website.

— Jonathan Vanian

For example, when one reviewer played a new Taylor Swift song for her AI friend, the device commented through a notification that it didn’t “think it’s bad at all” and “pretty typical for pop.”

The device is at the center of the societal debate about the rise of AI.

Friend plastered a subway station in New York this fall with ads that suggested that the pendant was better than a real friend, promising that it “will never bail on our dinner plans.”

The posters were immediately defaced with messages like “AI wouldn’t care if you lived or died.”

Those wanting to experience what it’s like to wear around an AI friend should place orders swiftly.

The company’s website currently says units will be shipping “Winter 2025/26,” but Friend founder Avi Schiffmann told CNBC that devices ordered early enough will ship before Christmas.  

— Kif Leswing

WATCH: Google releases Gemini 3.0 model, closes gap on ChatGPT