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Panos Panay, chief product officer of Microsoft Corp., displays the new Surface Laptop 3 computer during a Microsoft product event in New York on Oct. 2, 2019. Microsoft unveiled a dual-screen, foldable phone that will run on Google’s Android operating system, jumping back into a market it exited years ago.

Mark Kauzlarich | Bloomberg | Getty Images

Microsoft made a splash in 2012 when it introduced the Surface, the first computer it had built in its 37 years of existence. The computers are still kicking 10 years later, with Microsoft issuing annual updates, but Surface’s mega-growth is long in the past.

Microsoft tried to reimagine tablets, which are made popular by the iPad, when it launched into the PC market. In 2012, the Surface with Windows RT, later named Surface RT, was more than just a touchscreen slab like Apple’s iPad. The Surface could act as a full PC with an optional cover featuring a keyboard and trackpad.

Apple in the ensuing years would make the iPad more like the Surface, adding similar accessories, while Microsoft would do what it usually does: Roll out a series of small updates. It later added new Surface computers to the family, including an all-in-one PC, a standard laptop and miniature versions of the Surface.

Those steps have brought about growth. In Microsoft’s most recent fiscal year, Surface kicked in $6.7 billion of the company’s $198 billion in total revenue. That’s more than the total revenue of over 100 companies in the S&P 500 index.

But the hyper-growth vanished after the first three years. In the 2022 fiscal year, Surface revenue increased by 3%, despite being smaller than PC initiatives at several other companies. Apple’s Mac business, at almost $38 billion, grew about 8% over the same period.

Surfaces just aren’t as popular as other computers. They have never managed to take more than 2.1% market share of PC shipments, according to an estimate from technology industry researcher Gartner. Lenovo has a 25% share of the market, while HP has 19% and Dell has 18%, respectively.

Microsoft declined to comment on whether it considers Surface successful.

“We design Surface to be the one place where the best of Microsoft comes together, delighting customers and inspiring the Windows ecosystem,” a spokesperson told CNBC in an email. “Surface began as a tablet to replace your laptop, showcasing Windows capabilities like touch, ink, Windows Hello, and more. Since then, the 2-in-1 category has taken off and Surface has grown into an innovative portfolio of products offering premium designs and capabilities that consistently earn high customer satisfaction.” 

That Surface has not surpassed more experienced PC makers might not be such a bad thing anyway. PC builders are among Microsoft’s most prominent clients because they pay Microsoft a fee for the copy of Windows that goes on each computer. Upstaging them might not be wise.

Surface has held on to an important role — bringing to market Windows PCs with fresh designs, Gartner analyst Mikako Kitagawa told CNBC in an interview.

“I think those are the things they should really focus on, instead of looking for share gain and revenue growth,” she said.

If Microsoft were to charge forward in pursuit of dominant share, they could kill their customers, she said. Kitagawa recalled that Windows PC makers were not very happy with Microsoft when the first Surfaces arrived. “Taking 3% share was taking from somebody, right? That’s not incremental share,” she said.

Premium feel

Microsoft Corp.’s Surface tablet computers, aiming to compete with Apple’s iPad, are displayed at Hollywood’s Milk Studios in Los Angeles Monday, June 18, 2012. The 9.3-millimeter thick tablet comes with a kickstand to hold it upright and keyboard that is part of the device’s cover. (AP Photo/Damian Dovarganes)

Damian Dovarganes

The first line of the news release about the 2012 Surface showed Microsoft’s intent. These computers were meant to be “the ultimate stage for Windows.” A section near the bottom acknowledged the clients that were suddenly becoming the competition. “Microsoft is delivering a unique contribution to an already strong and growing ecosystem of functional and stylish devices delivered by original equipment manufacturers (OEMs) to bring the experience of Windows to consumers and businesses around the globe,” the company said.

The inaugural Surface, the Surface RT running Windows RT, boasted clever physical attributes. A thin but sturdy kickstand could sweep out and prop up the display on a table or a desk. The case was made out of magnesium in a process called VaporMg, which lends it a premium feel akin to the aluminum wrapping up Apple’s MacBooks. An optional magnetic Touch Cover contained a narrow keyboard and a trackpad that doubled as a cover for the display. A power-sipping Arm chip gave it respectable battery life.

But the Surface RT blocked people from opening programs that weren’t listed in Microsoft’s app store, preventing them from using most existing Windows software. Basically, there wasn’t a lot you could do with it, and many third-party developers hadn’t done the work to adapt their software to it. The device garnered less than glowing reviews, with The Verge calling it “honestly perplexing.” “Little inconsistencies and bafflements are everywhere,” The New York Times’ David Pogue wrote.

Microsoft Surface with Windows 8 Pro

Source: Microsoft.com

In 2013 Microsoft brought out the Surface RT’s more expensive and more powerful sibling, the Surface Pro. It contained a stylus, along with an Intel chip that could run real Windows programs, with stronger performance than the Surface RT.

For Microsoft to put forth a more traditional Intel-based Windows PC would be bold. It would directly challenge some of the company’s top clients. “It did not seem prudent,” Steven Sinofsky, president of Microsoft’s Windows division who left the company in 2012, wrote in “Hardcore Software,” a detailed recollection of his experience that he’s been publishing in parts on Substack. Windows was Microsoft’s main source of profit. If even one of the major Windows device makers were to stop building Windows PCs, that would be, in Sinofsky’s words, “a massive problem.”

Microsoft pressed on anyway.

Like the Arm-based Surface RT, the Intel-powered Surface Pro wasn’t perfect. It could only run for a few hours on a single charge, and it was heavy and impractical to use as a tablet. And regular laptops offered better keyboards than those that Microsoft sold separately for the Surface Pro.

Cutting into profit

Microsoft’s Surface Laptop Go 2 starts at $599.

Microsoft

A few months later Microsoft revealed a black eye. It trimmed the price of the Surface RT by $150 to $349 and instituted inventory adjustments for related parts and accessories, which resulted in a $596 million reduction in its quarterly net income.

But Microsoft did what it usually does. It stuck with the Surface line instead of ditching a challenged brand. It rolled out refinements, such as making the hinge on the back of the tablet adjustable and changing the aspect ratio in such a way that work became more comfortable in landscape orientation.

  1. By 2015, Microsoft had walked away from Windows RT and was focused on building devices with Intel chips that could run standard Windows applications.

Meanwhile, copycats were coming out from top PC makers such as Dell, HP and Lenovo. And Apple was also responding, rolling out the laptop-like 12.9-inch iPad Pro and compatible Apple Pencil stylus and Smart Keyboard cover in 2015.

It was a strong dose of validation for Microsoft. In 2012, before the Surface came out, and there were only rumors of Microsoft’s plans for Windows, Apple CEO Tim Cook told analysts that “you can converge a toaster and a refrigerator, but those things are probably not going to be pleasing to the user.”

Yet in 2017, Apple, perhaps Microsoft’s toughest corporate critic, capitulated. It came out with a toaster-refrigerator combo of its own, said Michael Gartenberg, a technology industry strategist and former Gartner analyst. “It’s clearly become a mainstream design,” Gartenberg said.

Also that year Microsoft introduced the Surface Laptop. While it was as boring as any other laptop, it left out the software that sometimes could burden Windows PCs from other manufacturers, the sorts of things end users might want to spend time deleting, Gartenberg said.

Microsoft Corp. surface 5 laptop computers on display at the company’s Ignite Spotlight event in Seoul, South Korea, on Nov. 15, 2022. CEO Satya Nadella gave a keynote speech at an event hosted by the company’s Korean unit.

SeongJoon Cho | Bloomberg | Getty Images

In 2019, Microsoft took another shot at an Arm-based Surface, with the Surface Pro X. Reviewers gave it credit for long battery life but dinged it for performance and compatibility reasons, not unlike the original Surface RT.

This year, Microsoft made things more complex by introducing an Intel-based Surface Pro 9 along with an Arm-based version, which put an end to the distinct brand for Arm-flavored Surface. People have fretted that the Arm model of the Pro 9 is still unable to run some programs. The Intel version has received more praise. “The removal of the headphone jack is the only new thing that’s wrong with it,” Ars Technica said in its review.

Those who opt for the Surface Pro 9 with an Arm chip can at least access a broad swath of apps. The 2022 update to Windows 11 includes a way to run over 50,000 Android apps through the Amazon Appstore.

If you look at it for just a second, the Surface Pro 9 with Intel inside looks a bit like the 10-year-old Surface RT. Changes inside and out have made it tougher to dismiss as a novelty. There’s a button to enable the Function row on the keyboard, which boasts a more responsive trackpad. Enhancements to Windows make it easier to tap buttons on the screen when using the Surface as a tablet. You can open the programs you need.

Surface Pro 9, Surface Laptop 5 and Surface Studio 2+.

Microsoft

Gartenberg, who lives in New Jersey, doesn’t see many people using Surfaces in the real world, although he did recently witness a man working on a Surface while walking around outside. The man was wearing a harness that held the Surface just off his chest, so he could tap on the screen when necessary, Gartenberg said.

There’s one place you’ll certainly see them, though. During televised games, you can spot players, coaches and referees using branded Surface machines at National Football League games as a result of a partnership Microsoft struck with the NFL in 2013.

Buffalo Bills defensive line coach Eric Washington reviews plays on a Microsoft Surface tablet

Robin Alam | Icon Sportswire | Getty Images

In the course of a decade, Microsoft has managed to raise the bar for Windows PC makers, demonstrating that a top tier of Windows can exist, Gartenberg said.

“If someone said to me, ‘I need a Windows PC,’ what would I recommend? I would say, ‘Go see what Microsoft is offering. Go see if that meets your needs,'” he said. “‘It’s not going to come with any junk you’re going to call me about, and it will just work.'”

‘No compromise whatsoever’

Surface Pro 9.

Microsoft

The Microsoft Surface Go is a good computer, but a very bad tablet

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Chinese EV players take fight to legacy European automakers on their home turf

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Chinese EV players take fight to legacy European automakers on their home turf

Xpeng CEO He Xiaopeng speaks to reporters at the electric carmaker’s stand at the IAA auto show in Munich, Germany on September 8, 2025.

Arjun Kharpal | CNBC

Germany this week played host to one of the world’s biggest auto shows — but in the heartland of Europe’s auto industry, it was buzzy Chinese electric car companies looking to outshine some of the region’s biggest brands on their home turf.

The IAA Mobility conference in Munich was packed full of companies with huge stands showing off their latest cars and technology. Among some of the biggest displays were those from Chinese electric car companies, underscoring their ambitions to expand beyond China.

Europe has become a focal point for the Asian firms. It’s a market where the traditional automakers are seen to be lagging in the development of electric vehicles, even as they ramp up releases of new cars. At the same time, Tesla, which was for so long seen as the electric vehicle market leader, has seen sales decline in the region.

Despite Chinese EV makers facing tariffs from the European Union, players from the world’s second-largest economy have responded to the ramping up of competition by setting aggressive sales and expansion targets.

“The current growth of Xpeng globally is faster than we have expected,” He Xiaopeng, the CEO of Xpeng told CNBC in an interview this week.

Aggressive expansion plans

Chinese carmakers who spoke to CNBC at the IAA show signaled their ambitious expansion plans.

Xpeng’s He said in an interview that the company is looking to launch its mass-market Mona series in Europe next year. In China, Xpeng’s Mona cars start at the equivalent of just under $17,000. Bringing this to Europe would add some serious price competition.

Xpeng steps up global rivalry with mass-market Mona EV series

Meanwhile, Guangzhou Automobile Group (GAC) is targeting rapid growth of its sales in Europe. Wei Haigang, president of GAC International, told CNBC that the company aims to sell around 3,000 cars in Europe this year and at least 50,000 units by 2027. GAC also announced plans to bring two EVs — the Aion V and Aion UT — to Europe. Leapmotor was also in attendance with their own stand.

There are signs that Chinese players have made early in roads into Europe. The market share of Chinese car brands in Europe nearly doubled in the first half of the year versus the same period in 2024, though it still remains low at just over 5%, according to Jato Dynamics.

“The significant presence of Chinese electric vehicle (EV) makers at the IAA Mobility, signals their growing ambitions and confidence in the European market,” Murtuza Ali, senior analyst at Counterpoint Research, told CNBC.

Tech and gadgets in focus

Many of the Chinese car firms have positioned themselves as technology companies, much like Tesla, and their cars highlight that.

Many of the electric vehicles have big screens equipped with flashy interfaces and voice assistants. And in a bid to lure buyers, some companies have included additional gadgets.

For example, GAC’s Aion V sported a refrigerator as well as a massage function as part of the seating.

The Aion V is one of the cars GAC is launching in Europe as it looks to expand its presence in the region. The Aion V is on display at the company’s stand at the IAA Mobility auto show in Munich, Germany on September 9, 2025.

Arjun Kharpal | CNBC

This is one way that the Chinese players sought to differentiate themselves from legacy brands.

“The chances of success for Chinese automakers are strong, especially as they have an edge in terms of affordability, battery technology, and production scale,” Counterpoint’s Ali said.

Europe’s carmakers push back

Legacy carmakers sought to flex their own muscles at the IAA with Volskwagen, BMW and Mercedes having among the biggest stands at the show. Mercedes in particular had advertising displayed all across the front entrance of the event.

BMW, like the Chinese players, had a big focus on technology by talking up its so-called “superbrain architecture,” which replaces hardware with a centralized computer system. BMW, which introduced the iX3 at the event, and chipmaker Qualcomm also announced assisted driving software that the two companies co-developed.

Volkswagen and French auto firm Renault also showed off some new electric cars.

Regardless of the product blitz, there are still concerns that European companies are not moving fast enough. BMW’s new iX3 is based on the electric vehicle platform it first debuted two years ago. Meanwhile, Chinese EV makers have been quick in bringing out and launching newer models.

“A commitment to legacy structures and incrementalism has slowed its ability to build and leverage a robust EV ecosystem, leaving it behind fast moving rivals,” Tammy Madsen, professor of management at the Leavey School of Business at Santa Clara University, said of BMW.

While European autos have a strong brand history and their CEOs acknowledged and welcomed the competition this week in interviews with CNBC, the Chinese are not letting up.

VW CEO says "when you have good competitors you have to be better"

“Europe’s automakers still hold significant brand value and legacy. The challenge for them lies in achieving production at scale and adopting new technologies faster,” Counterpoint’s Ali said.

“The Chinese surely are not waiting for anyone to catch-up and are making significant gains.”

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OpenAI announces new mentorship program for budding tech founders

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OpenAI announces new mentorship program for budding tech founders

Dado Ruvic | Reuters

OpenAI on Friday introduced a new program, dubbed the “OpenAI Grove,” for early tech entrepreneurs looking to build with artificial intelligence, and applications are already open.

Unlike OpenAI’s Pioneer Program, which launched in April, Grove is aimed towards individuals at the very nascent phases of their company development, from the pre-idea to pre-seed stage.

For five weeks, participants will receive mentoring from OpenAI technical leaders, early access to new tools and models, and in-person workshops, located in the company’s San Francisco headquarters.

Roughly 15 members will join Grove’s first cohort, which will run from Oct. 20 to Nov. 21, 2025. Applicants will have until Sept. 24 to submit an entry form.

CNBC has reached out to OpenAI for comment on the program.

Following the program, Grove participants will be able to continue working internally with the ChatGPT maker, which was recent valued $500 billion.

Other industry rivals have also already launched their own AI accelerator programs, including the Google for Startups Cloud AI Accelerator last winter. Earlier this April, Microsoft for Startups partnered with PearlX, a cohort accelerator program for pre-seed companies.

Nurturing these budding AI companies is just a small chip in the recent massive investments into AI firms, which ate up an impressive 71% of U.S. venture funding in 2025, up from 45% last year, according to an analysis from J.P. Morgan.

AI startups raised $104.3 billion in the U.S. in the first half of this year, and currently over 1,300 AI startups have valuations of over $100 million, according to CB Insights.

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Benioff says he’s ‘inspired’ by Palantir, but takes another jab at its prices

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Benioff says he's 'inspired' by Palantir, but takes another jab at its prices

Salesforce CEO Marc Benioff on what the market is getting wrong about AI

Marc Benioff is keeping an eye on Palantir.

The co-founder and CEO of sales and customer service management software company Salesforce is well aware that investors are betting big on Palantir, which offers data management software to businesses and government agencies.

“Oh my gosh. I am so inspired by that company,” Benioff told CNBC’s Morgan Brennan in a Tuesday interview at Goldman Sachs‘ Communacopia+Technology conference in San Francisco. “I mean, not just because they have 100 times, you know, multiple on their revenue, which I would love to have that too. Maybe it’ll have 1000 times on their revenue soon.”

Salesforce, a component of the Dow Jones Industrial Average, remains 10 times larger than Palantir by revenue, with over $10 billion in revenue during the latest quarter. But Palantir is growing 48%, compared with 10% for Salesforce.

Benioff added that Palantir’s prices are “the most expensive enterprise software I’ve ever seen.”

“Maybe I’m not charging enough,” he said.

Read more CNBC tech news

It wasn’t Benioff’s first time talking about Palantir. Last week, Benioff referenced Palantir’s “extraordinary” prices in an interview with CNBC’s Jim Cramer, saying Salesforce offers a “very competitive product at a much lower cost.”

The next day, TBPN podcast hosts John Coogan and Jordi Hays asked for a response from Alex Karp, Palantir’s co-founder and CEO.

“We are very focused on value creation, and we ask to be modestly compensated for that value,” Karp said.

The companies sometimes compete for government deals, and Benioff touted a recent win over Palantir for a U.S. Army contract.

Palantir started in 2003, four years after Salesforce. But while Salesforce went public in 2004, Palantir arrived on the New York Stock Exchange in 2020.

Palantir’s market capitalization stands at $406 billion, while Salesforce is worth $231 billion. And as one of the most frequently traded stocks on Robinhood, Palantir is popular with retail investors.

Salesforce shares are down 27% this year, the worst performance in large-cap tech.

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Salesforce and Palantir year to date stock chart.

We're seeing an incredible transformation in enterprise, says Salesforce CEO Marc Benioff

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