Why Windows Is Turning Into a Cash‑Extraction Machine: The AI Push, User Backlash, and Microsoft’s Business Playbook

Q: The Three‑Way AI Strategy

- **AI in the user flow** – Integrating generative AI and autonomous agents to anticipate user actions. - **C‑Pilot for Microsoft 365** – Making the productivity suite context‑aware on Windows. - **C‑Pilot Plus for PCs** – Boosting hardware performance with enhanced AI features.

Q: Immediate User Reaction

- Tweets from Windows‑and‑Devices president Pavan Davaluri were met with angry comments: - Claims that Windows is pushing users toward macOS and Linux. - Accusations of a "Twitter bubble" where Microsoft pretends AI will create wealth. - Fears about data being sold without permission. - The sentiment reflects a broader frustration with recent Windows changes.

Q: Historical Context: From DOS to Cloud Dominance

- **Late 80s‑90s:** Bill Gates flooded the market with MS‑DOS, later Windows, gaining control over personal computing. - **Antitrust era:** Forced bundling of Internet Explorer demonstrated early attempts to dictate standards. - **Satya Nadella’s era (2014‑present):** Shift to cloud services (Azure, Office 365) turned Microsoft into a recurring‑revenue powerhouse. - FY 2025 revenue: $252 billion, with >55 % ($138 billion) from cloud. - Enterprise Windows 11 adoption >60 % after Windows 10 support ended. - The profit model now values the ecosystem more than the desktop experience.

Q: How the Business Model Hurts the Consumer

- **Ads and subscriptions:** - Persistent ads in the UI. - OneDrive and Microsoft 365 forced onto a Microsoft account. - Office moved from a free bundle to a paid subscription. - **Forced updates:** Automatic restarts can interrupt work, causing data loss and missed deadlines. - **Performance degradation:** Background OneDrive sync and telemetry slow down the OS; Microsoft even admitted this.

ColdFusion

Summary Date: 2025-12-11 12:55:11

•

3 min read

Why Windows Is Turning Into a Cash‑Extraction Machine: The AI Push, User Backlash, and Microsoft’s Business Playbook

Introduction

Microsoft recently announced that Windows 11 will become an "agentic" operating system, embedding AI and Copilot directly into the desktop experience. The announcement sparked a wave of criticism on social media, with many users accusing Microsoft of turning the beloved OS into a platform for ads, data collection, and forced upgrades.

The Three‑Way AI Strategy

AI in the user flow – Integrating generative AI and autonomous agents to anticipate user actions.
C‑Pilot for Microsoft 365 – Making the productivity suite context‑aware on Windows.
C‑Pilot Plus for PCs – Boosting hardware performance with enhanced AI features.

Immediate User Reaction

Tweets from Windows‑and‑Devices president Pavan Davaluri were met with angry comments:
Claims that Windows is pushing users toward macOS and Linux.
Accusations of a "Twitter bubble" where Microsoft pretends AI will create wealth.
Fears about data being sold without permission.
The sentiment reflects a broader frustration with recent Windows changes.

Historical Context: From DOS to Cloud Dominance

Late 80s‑90s: Bill Gates flooded the market with MS‑DOS, later Windows, gaining control over personal computing.
Antitrust era: Forced bundling of Internet Explorer demonstrated early attempts to dictate standards.
Satya Nadella’s era (2014‑present): Shift to cloud services (Azure, Office 365) turned Microsoft into a recurring‑revenue powerhouse.
FY 2025 revenue: $252 billion, with >55 % ($138 billion) from cloud.
Enterprise Windows 11 adoption >60 % after Windows 10 support ended.
The profit model now values the ecosystem more than the desktop experience.

How the Business Model Hurts the Consumer

Ads and subscriptions:
Persistent ads in the UI.
OneDrive and Microsoft 365 forced onto a Microsoft account.
Office moved from a free bundle to a paid subscription.
Forced updates: Automatic restarts can interrupt work, causing data loss and missed deadlines.
Performance degradation: Background OneDrive sync and telemetry slow down the OS; Microsoft even admitted this.

The AI Overload

$13 billion investment in OpenAI made AI a centerpiece of Windows.
Copilot features appear across Word, Excel, Paint, and the OS itself, but many are buggy or hallucinate.
Example dialogue shows Copilot struggling with simple web navigation and providing inaccurate links.
Microsoft warned against using Copilot for critical spreadsheet work due to hallucinations.

Privacy and Security Concerns

Telemetry: Even on the lowest setting, Windows sends usage data, hardware details, and app behavior back to Microsoft.
TPM 2.0 requirement: Enforced hardware chip ties the device ID to a Microsoft account, limiting user control.
Windows Recall (later rebranded): Planned to capture screenshots and activity logs for AI search; backlash led to a delayed, opt‑out version with encryption.
Local‑account removal: Windows 11 setup now mandates a Microsoft account and internet connection, pushing users into the cloud.

Market Impact

Dominance remains: >1 billion devices, ~70 % desktop market share.
Erosion of goodwill: Users increasingly migrate to Linux for transparency or macOS for stability.
Potential shift: As Linux gaming compatibility improves, more users may leave Windows if the experience continues to degrade.

Voices from the Community

Programmers like Rob Braxman compare the current backlash to the DOS‑to‑Windows transition in 1985.
Some long‑time Windows users have already switched to Macs, citing fewer ads, better privacy, and smoother updates.

Conclusion

Microsoft’s AI‑first roadmap aligns with shareholder interests—driving the company toward a $5 trillion valuation—but it does so at the expense of everyday users. Forced accounts, intrusive telemetry, unreliable AI features, and a cluttered UI have turned Windows from a trusted tool into a perceived cash‑extraction platform. Unless Microsoft re‑prioritizes user experience over short‑term profit, the OS may continue to lose goodwill and market share to more user‑centric alternatives.

Microsoft’s AI‑driven strategy boosts its bottom line but alienates the very users who made Windows dominant; the long‑term health of the platform depends on restoring user control, privacy, and a frictionless experience.

Full Transcript

We are evolving the OS.
Windows is now your canvas for AI and
agents. We're innovating in three key
ways. First, bringing AI and agents into
your flow and making it more intuitive
to use. And second, making Microsoft 365
C-Pilot more contextually helpful on
Windows. And third, making C-Ilot Plus
PCs even more powerful with enhanced AI.
That clip was an announcement from
Microsoft a few weeks ago. They're
making it clear that AI is now at the
forefront of Windows. Windows 11, they
say, is becoming an agentic operating
system. Agentic, the latest buzzword for
autonomous AI. Soon, your PC will make
decisions on your behalf with the help
of a built-in AI. Shortly after the
event, Pavan Davaluri, the president of
Windows and Devices, tweeted the news
online. The response was, well, far from
pleasant. Some of the comments directly
under the tweet received thunderous
applause in the form of likes. They read
as follows. It's evolving into a product
that's driving people to Mac and Linux.
Another one says, "Stop this nonsense.
No one wants this. You live in a Twitter
bubble where AI will create tons of
wealth and you'll perish unless you
adopt it now. But your users are not in
this bubble. They don't care about any
of this." Sh. They chat with chat GBT
and that's about it. And another
comment, "Nobody wants this except the
parties you're selling our data to
without permission." If you've used a
Windows PC in the last few years, in
some sense, you may have felt the same
way, a little frustrated. The AI push
seems like just the latest in a string
of efforts to make it feel like the
computer that you paid for isn't really
yours anymore. From forced upgrades,
advertisements carelessly littered
through the user interface, online
account requirements for everything, and
now an aggressive push into AI. You get
the picture now. Windows 11 has become
one of the biggest sources of user
frustration in recent memory. As you'll
later see, it's all part of the plan for
Microsoft CEO Satin Nadella, and it's
all working just as it's intended to.
These changes have made a lot of people
wonder, is Windows still a tool for the
user, or is it a cash extraction
exercise for Microsoft? And hey, these
feelings aren't unfounded. It comes from
years of bad decisions. But here's the
thing. Curiously, at the same time,
Microsoft is now currently valued at
$3.8 trillion and on track to reach 5
trillion. It's one of the most powerful
companies in the world. So from a broad
perspective, these decisions are making
business sense. But right there, you can
see it. A massive divergence is forming
as the value of the company skyrockets.
The user experience of Windows is moving
in the opposite direction down the
toilet. Everyone can sense there's a
problem here. But the question needs to
be asked, what exactly is happening
here? How did Windows, the flagship
operating system of the world, now end
up feeling like it no longer works for
the person using it? And why does
Microsoft keep doubling down on these
decisions? If you've ever wondered these
questions, then today is your lucky day
because we'll answer them right now in
this episode.
You are watching Tool Fusion TV.
Microsoft Windows is the operating
system that entire generations grew up
with. The one we learned to type on, the
one that taught many of us what a
desktop even was. In 2025, its presence
is still enormous. More than 1 billion
devices run Windows. It holds around 70%
of the desktop market with Mac OS at 13%
and Chrome OS under 2%. But for years
now, Windows has fostered a slow but
steady drip of annoyance from users. A
programmer by the name of Rob Braxman,
who had his software demoed on stage by
Bill Gates, states that he hasn't seen
backlash this bad since the transition
from DOS 3.1 to Windows 1.0 all the way
back in 1985. I've never encountered so
much resistance to moving to a newer
version, likely since DOSs 3.1 to
Windows, and that was justifiable. But
in recent years with the advent of
Windows 11, I have to say that Microsoft
has truly gone crazy. If the experience
has been getting worse for so long, why
does Microsoft keep making this
decisions? Why does Windows suck so much
today? To understand why Windows feels a
bit like a money extracting husk, we
briefly need to look at how Microsoft
came to dominate and what they end up
doing when they find themselves top dog.
Back in the late 80s and '90s, Bill
Gates built his empire by getting MS
DOSs onto as many machines as possible.
It's a wild story that I've covered
previously in the piece Gary Kildall,
the man who should have been Bill Gates.
But the point was, once Windows was
everywhere, Microsoft could dictate the
rules of personal computing. Look no
further than the famous antitrust case
and deposition of Bill Gates in regards
to forcing Internet Explorer onto
everyone or just some of the aggressive
contracts signed with hardware partners.
In a way, it was a sign of things to
come. Satya Nadella, the company's
current CEO, is continuing the same idea
of cornering the market, then dictating
the rules, but in a less illegal way.
He's capitalizing on Windows legacy
reach to push all users into Microsoft's
online ecosystem. When Nadella took over
in 2014, Azure, Office 365 and
enterprise licensing became the core of
Microsoft and you can see the effect
clearly in the company's valuation. This
chart shows the moment Nadella steps in.
You can see a sharp rise and continuous
rise in shareholder champagne popping as
the company steered itself towards cloud
services and long-term reoccurring
revenue. It has been a remarkably
successful strategy for shareholders. In
fiscal year 2025, Microsoft reported 252
billion in revenue and over 55% of that
or about 138 billion came from cloud
services alone. When much of that
business depends on B2B or enterprise
clients and online services, the
incentives behind Windows naturally
shift. And this context explains why the
operating system feels the way it does.
In the corporate world, the grip of
Microsoft is virtually absolute.
Enterprise adoption of Windows 11 has
passed 60% since support for Windows 10
ended. More on that later, and Microsoft
controls roughly 40% of the server
market. So, some of you might be
wondering, why do companies still use
Windows if there's all these problems
that we're going to soon talk about?
Well, aside from company legacy systems
and processes for software support,
Windows is still king. But going back to
Microsoft's shift to the cloud, it's
insanely profitable. When almost every
corporation relies on Windows, who cares
about home users? They do very little
for the bottom line of Microsoft. Their
frustration rarely affects revenue, and
their complaints don't threaten billiond
dollar contracts.
So, it's no wonder that over time,
Windows began reflecting shareholder
priorities rather than the users. Now,
let's get into the juicy stuff. Just
some of the mind-boggling decisions that
Microsoft has made. It's windows slow
decline into trash.
And I I don't think it like has to
always be this way. I absolutely
definitely think there is a path to
redemption for Windows. I just don't
think they're going to take it. I don't
think it would take that much work to
make it not trash. Genuinely, the thing
that bothers me most is the things that
they actively do that actively make it
bad or worse. If I have purchased my
Windows, I don't want freaking ads. Any
amount. Don't just like put all this
junk there all the time. Don't make
search bad. Once you reach the desktop,
Windows keeps trying to steer you in the
same direction online. It's pushing you
to sign into account for almost
everything. It encourages you to store
files on one drive. It is constantly
reminding you to sign up for one drive
so that all of your files and data and
everything can be hosted by Microsoft on
the one drive. Microsoft Office is now a
subscription tied directly to the same
account.
>> During the Windows 7 era and before uh
you would get Microsoft Office for free.
It came with the operating system and
you didn't have to sign in. Now it's a
subscription service. Yeah. Microsoft is
basically just milking you for every
single dime.
>> Even shutting down your computer is no
longer simple because Windows insists on
installing updates first. I'm sure your
boss will understand when your Windows
PC randomly shuts down in the middle of
say an important meeting or just before
a deadline with your work unsaved just
for it to spend if you're lucky minutes
booting back up while it does forced
updates even though you said whichever
option was closest to not now I'm busy
or if you're really unlucky hours to do
those updates. Try telling your boss
that it's Microsoft's fault that you
can't finish your work. Honestly,
Windows 11 has hundreds of small issues
that users keep running into. The list
just goes on. The OS was so bogged down
with junk that even the user interface
was measurably slower than the previous
version. And the crazy thing is
Microsoft admitted that the syncing to
One Drive in the background was slowing
down the computers of users. But the
worst was yet to come.
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story.
At the same time, without fixing the
basics, the company began pushing AI
into every part of its services,
including Windows itself. They invested
more than 13 billion into OpenAI, the
company behind Chat GPT. And that
investment was one of the largest bets
that Microsoft had ever made on a single
technology. As aside, the investment
lost Microsoft 11.5 billion in just the
last quarter. But with that level of
investment, it was to no surprise that
AI became central in Microsoft's plans.
New AI features began spraying all over
Word, Excel, Outlook, Paint, and
C-Pilot. Some of these features were
useful, but a lot of them felt like they
were simply added because the company
could. So, basically, what they want in
an AI PC is first, you should be able to
interact with it naturally in text or
voice and have it understand you.
Second, it should be able to see what
you see and offer guided support. So,
I'm going to select screen two. And now,
Copilot is watching everything. Can you
help me find a flash game on the
internet known as Pico School? I believe
it's on Newgrounds.
>> Pico School is a classic flash game.
Find it on their website and also on the
internet archive.
>> Jesus Christ. Can you take me there?
>> Sure. To find Pico School on Newgrounds,
just open your web browser and search.
It's a popular flash game, so it should
be one of the top
>> Can you do it for me?
>> Sure. I can't directly navigate websites
or open specific online.
>> WHAT THE IS THE POINT? OKAY, WHAT IS THE
POINT?
>> IRONICALLY, Microsoft warned Windows
users not to use C-Pilot in Excel for
anything that quote requires accuracy,
i.e. spreadsheets. Why? Because it
hallucinates too much. And that whole
agentic computer thing, well, C-Pilot
doesn't work as well as advertised yet.
Does talking to your computer work like
in its TV ad? Can you get me a link to
one that's in stock?
>> Here's the link to Best Buy. Link to
bestbuy.com/11bestby/shore
website. And it's for most definitely in
stock. And it's for most definitely in
stock. And it's available for pickup or
delivery. And it's for most definitely
in stock.
>> Okay. Thanks, co-pilot.
>> What all these changes had in common was
they kept people connected to
Microsoft's online services. And this is
where the bigger picture becomes
clearer. Windows is the surface. The
real product is the network of services
underneath it. And they all point in one
direction towards benefiting Microsoft's
shareholders and not the user. You can
clearly see it in the transition from
Windows 10 to Windows 11 when Microsoft
officially ended support for Windows 10
in October 2025. Roughly 40% of its
users were still on it. That's 400
million people. The message was clear.
Move to Windows 11 or be left behind.
The problem though was that many users
couldn't even upgrade if they wanted to.
Their computers were still modern and
powerful, but Windows 11 refused to
install because of a new hardware
requirement called a TPM 2.0. So, what
the heck is that? Well, a TPM or trusted
platform module is a chip that stores
security keys.
Microsoft framed it as necessary
protection, but to millions of users, it
felt like a lock added without consent.
Devices that worked perfectly well the
day before were now suddenly considered
outdated. But there were more problems
with the TPM chip.
Pay attention to that. The TPM
endorsement key, that's the unique
identifier of your machine. Now it is
tied to your Microsoft ID identity. You
can't change it. You can't delete it.
Now the device ID is specifically known
and is pulled from the TPM.
Third parties can access this now with
no restriction via API. If you want to
know how to check your TPM status, here
are example commands on Windows. By the
way, you can restrict access. There's a
deliberate purpose to all this madness.
And it's all tied to the AI. So don't
think this is some random choice by
Microsoft. And that was only the start.
The Windows 11 setup process now
requires a Microsoft account and an
internet connection. the option to
create a local account was removed and
the usual workarounds were patched out.
Have to have a Microsoft email address
to use a Windows 11 PC. At least that's
the way that Microsoft is pushing it
because even the workarounds to get a
local account working on a new Windows
computer, which are slowly being broken
as we go, even though people keep
finding new ways, Microsoft keeps
breaking it. Now, they're going to get
to the point where you can't even use
the PC with a local account. It's all a
push to funnel users into cloud services
and extract money from them. But that
authoritarian approach comes with a
cost.
When customers are constantly thrown
around and beaten over the head with
money extracting tactics, well, what do
you know? They don't like it. People who
once felt at home on Windows now feel
like they're being watched, nudged, and
controlled by the operating system.
Instead of being a user, they feel like
they're part of a product that they
never agreed to be in. In some cases,
they completely lose control of their
computer. For example, Rob Brman had his
Linux partition wiped without his
consent because Windows 11 didn't like
him running two OSS on his computer. I
wasn't even using Bit Locker, and it
still signal Windows to take over the
boot sequence. This is not a bug. This
is by design very devious.
>> Privacy erosion is also a big part of
this shift. Windows has always collected
some information in the background. But
over the years, that quiet data
collection grew into something that
people could no longer ignore. Microsoft
calls it telemetry. It's meant to
improve stability. But investigations
have shown that even on the lowest
setting, Windows still gathers details
about the apps you use, your hardware,
and your system behavior. That
information is sent back to Microsoft
sometimes for Microsoft to serve you
better ads for their services and other
times to a wide network of analytics and
content providers. Unless you're on an
enterprise edition, there's no real way
to switch it off. So, when Microsoft
announced Windows Recall, the reaction
made sense. Recall aimed to record
everything you've ever done on your PC
by capturing snapshots of your screen
and feeding it to an AI so you can
search your previous activity in natural
language. It was framed as a convenient
tool, but to many users, it felt like
confirmation that Windows was crossing a
line. Security researchers later found
that the way recall stored data was not
fully protected and could be accessed by
malware or anyone with local access.
Their software, their malware, their
virus running on your computer. Now they
have a treasure trove of things to pick
from. They don't just have your most
recent email. They have every screenshot
that your computer has ever taken. They
have your banking details because they
don't get scrubbed when Copilot or
Recall takes a photo of it every few
seconds. They know everything about you
and can impersonate you to a tea. And
Microsoft says we shouldn't worry about
this. It's all local. But here's the
thing. There is no technical barrier to
sending an instruction to the AI
companion to examine your recall
database and report findings to HQ. This
can be done without any data leaving
your computer. The backlash was strong
enough that Microsoft eventually pulled
the feature before launch. It eventually
returned as an opt- out tool with
encryption this time and stronger
authentication. But even with these
improvements, people are still very
unsure about it. At this point, it's no
longer about a single feature. When you
combine the terrible user experience and
growing privacy concerns, it's easy to
see why people are exploring
alternatives. Users who want more
transparency and more control are
choosing Linux. And those who want
something just simple and stable are
going to Mac OS. And don't get me wrong,
Windows still dominates the consumer
market, but it's slowly losing market
share.
Pavan Davaluri, president of Windows and
Devices, publicly acknowledged the
criticism. In a tweet, he listed
reliability and performance issues and
ease of use issues are areas that need
attention. The reaction, yet again,
wasn't very kind.
In the end, this story is less about
Windows changing and more about
Microsoft's priorities. The company
found a model that maximizes shareholder
value, but it comes at the cost of the
user experience. So the real question is
whether Microsoft is willing to put
users first, even if that means earning
a little less. But as Linux software
compatibility improves, especially for
games, more users will migrate if things
keep going. But it will be a long time
until Windows is dethroned. So to all
the Windows users out there, what's your
take on this? Do you feel that Microsoft
has pushed too far? For me, I sweared by
Windows for the longest time, but I
begrudgingly made the move to Mac OS
when the M2 generation came out. And
frankly, besides some strange UI
decisions, it's been pretty smooth
sailing. And it's worth not feeling like
you're being spied on or having ads in
your software. And it's clear that I'm
not the only one.
>> There's an update for our switching to
Apple video.
>> Oh, for one thing,
this is still in my backpack
>> still.
>> Still, okay, I switched by now.
Wait, what about second MacBook Pro?
>> I bought this with my own money.
I have not bursted the laptop in like 8
years.
I opened this piece of crap up, this
Windows garbage. The driver update
literally failed. Bricked it. It took me
like 2 hours to get it. And I was just
like, "Fuck this." And ordered a
MacBook.
I can't think of many people on staff
who in the past were more adamantly
anti-Mac than this man.
>> So that is the crisis in Windows. How it
went from a beloved operating system to
an absolute dumpster fire littered with
ads and AI slop and the reasons as to
why Microsoft drove it in that
direction. Anyway, that's about it from
me. My name is Dogo and you've been
watching Cold Fusion and I'll catch you
again soon for the next episode. Cheers
guys. Have a good one.
Co fusion. It's me thinking.

Summary

Why Windows Is Turning Into a Cash‑Extraction Machine: The AI Push, User Backlash, and Microsoft’s Business Playbook

Introduction

The Three‑Way AI Strategy

Immediate User Reaction

Historical Context: From DOS to Cloud Dominance

How the Business Model Hurts the Consumer

The AI Overload

Privacy and Security Concerns

Market Impact

Voices from the Community

Conclusion

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