Corporate America is increasingly adopting Microsoft Copilot AI, but there is still some hesitation.

• One year has passed since Microsoft launched its Microsoft 365 Copilot AI as an enterprise solution, and adoption is increasing rapidly.
• The CNBC Technology Executive Council's latest bi-annual survey reveals that many companies are still in the testing phase and uncertain about the value of AI, despite its increasing popularity.
• Other gen AI tools that companies indicate they are using include OpenAI's enterprise product running on Microsoft Azure and Meta's Llama.

Despite initial forecasts predicting billions of dollars in annual sales, the adoption of Microsoft 365 Copilot, the company's flagship generative AI tool for the office market, is expanding quickly within corporations. However, many companies are still hesitant to fully implement the technology.

According to a recent bi-annual survey of technology executives on the CNBC Technology Executive Council, which includes views from tech leaders such as CTOs and CISOs at various companies across different sectors, including retail, industrials, health care, energy, and financial services.

The majority of tech executives surveyed (63%) say new investments in AI are accelerating, while a third describe their efforts as cautious and are evaluating AI investments.

The CNBC survey revealed that Copilot, introduced a year ago, has quickly become the top choice among corporate enterprises, with 79% of respondents stating that their company uses it.

The tech giant's numbers on full, permanent deployment aren't as clear a win as expected, with only 50% of survey respondents saying their organizations have fully adopted Copilot, while 17% did not decide to do so and another third of companies are still in the testing phase.

Tech leaders are uncertain about the value of Copilot, which costs $30 per user monthly. An equal number of respondents answered either yes or no to whether it has been worth the cost, while 50% said it is too soon to determine. The CNBC survey predicts that the numbers of companies using Copilot will increase over time, with only one-third saying they have no plans to use it, and two-thirds saying they will use it specifically in the future.

Deloitte research shows that two-thirds of organizations are increasing their investments in gen AI due to its strong early value. However, when it comes to scaling this value, a different picture emerges. Many enterprise AI projects are still in the pilot or proof-of-concept stage, with over two-thirds of organizations stating that they have only moved 30% or fewer of their gen AI experiments into full production.

Despite the potential benefits of enterprise AI adoption, companies may still lack confidence in implementing it, according to Deloitte. Over 40% of companies struggle to define and measure the impact of gen AI initiatives, and less than half have established key performance indicators to measure AI return effectively. Additionally, many companies believe that standard success measures are inadequate.

Despite Deloitte's research, many companies are hesitant to adopt AI due to concerns about their infrastructure and the availability of sufficient data for custom models. Additionally, risks, regulations, and governance issues are hindering their ability to move quickly and scale gen AI.

How the gen AI competition stacks up against Microsoft

Microsoft has disclosed that the number of people who use Copilot daily at work has nearly doubled quarter-over-quarter, with nearly 60% of the Fortune 500 now using the tool. Additionally, the number of customers with more than 10,000 seats has more than doubled quarter-over-quarter, including major companies such as Capital Group, Disney, Dow, Kyndryl, and Novartis. At a price of $30 per month per user, this equates to an annual revenue of $3.6 million for 10,000 employees.

Deloitte Consulting's head of AI and principal, Jim Rowan, states that companies have learned from their cloud adoption experiences that the total cost of ownership can quickly become expensive, leading them to be cautious about committing to vendors.

While Microsoft is the leader in enterprise wins, it is not the only one, according to a CNBC survey. Azure, the cloud offering from Microsoft's biggest AI partner and AI investment, OpenAI, is used by nearly two-thirds of companies. Llama, a large language model from 's, is the next most popular gen AI for corporate enterprise, used by 38% of firms, followed by Anthropic (13%) and Mistral, a French AI startup backed by top Silicon Valley VC firms, Microsoft, and former Google chairman Eric Schmidt, which is used by 8% of companies.

According to a Morgan Stanley study on Copilot, 94% of CIOs anticipate adopting Microsoft's generative AI products in the next year, an increase from 63% in Q4 2023. Microsoft 365 Copilot was cited by 68% of CIOs, while Azure OpenAI Services were cited by 41% of CIOs.

Rowan stated that it is not surprising to see Microsoft leading the enterprise AI race as it becomes increasingly difficult for companies to justify investments, especially in the early stages, as they move further away from Microsoft 365 Copilot. This tool integrates seamlessly with an existing tech platform already deployed across the enterprise and has become an integral part of our daily work. However, Rowan noted that for many other AIs, there is no easy button to press like Microsoft 365.

To justify the cost of an enterprise-wide solution like Copilot, Rowan emphasizes the importance of putting as much thought into employee training and engagement as into the technology investment itself. He suggests that leadership should communicate the benefits of AI and how employees are using it to ensure a successful implementation.

At least half of employees in organizations are using AI, according to 46% of CNBC survey respondents. Meanwhile, 42% of respondents say that one-quarter of their workforce is using AI.

A majority of businesses (84%) agree that AI tools will align with their business plans.

It is not illogical for executives to claim uncertainty about the KPIs and ROI at this stage of the AI adoption curve, while still emphasizing the importance of their company being on the AI journey.

Rowan believes that a core approach to R&D should guide thinking. He emphasizes that there is always a question of where a firm should begin, but the question of whether the R&D effort should be initiated is never present. According to Rowan, the best way to start is by identifying a set of use cases and entering into the AI value creation mode. He advises failing fast, making changes, and addressing any issues that arise.

He believes that companies risk falling behind if they fail to keep up with the rapid pace of technological advancements.

A bi-annual survey was conducted among a sample of CNBC Technology Executive Council members between October 8th and October 21st.