Having friends who work at Microsoft, this is not really surprising at all. The company has always had deep structural problems. The AI change has really just exposed it and is aggressively accelerating the inevitable implosion. It's truly in a free fall that is planned and orchestrated perfectly by their upper management. Their CEO and VPs are convinced you don't need engineering know-hows any more because of AI, and they got all the management layers to sincerely agree with them. Not in a malicious or subverting way, but in a "you can't get a man to understand something his salary depends on him not understanding it" way.

Microsoft has a moat, but their moat is having billions of dollars to spend on data centers. It's a failure everywhere else. It'll continue to rake in billions in revenue because people need compute now, but it's rotten at the top.