Microsoft leadership position in GenAI consistently strong, new survey shows

Investing.com -- Microsoft continues to solidify its dominant role in the generative AI space, according to Morgan Stanley’s 2Q25 CIO survey. 

The firm said its research indicates that “Microsoft’s leadership position in GenAI remains consistently strong,” with CIOs demonstrating both steady near-term demand trends and growing product adoption expectations.

The firm highlighted that CIOs now expect to deploy Microsoft (NASDAQ:MSFT) 365 Copilot across 31% of endpoints over the next 12 months, up from 17% in the previous quarter. 

“This suggests improving penetration,” Morgan Stanley (NYSE:MS) noted.

Despite slightly softer overall software spending intentions, Microsoft stood out. According to the bank, CIOs project a +6.3% increase in forward-year spending on Microsoft tools, compared to broader software at +3.6%. 

“Microsoft continues to lead the pack,” the analysts said, adding that “67% of CIOs also expect an increase in net spending on Microsoft tools, emblematic of the company’s AI leadership position.”

Azure remains a key pillar. “57% of CIOs who currently use or plan to use Azure expect to increase spend over the next 12 months,” in line with last year’s 60%. Office 365 spending intentions also strengthened, with 55% of CIOs planning to increase spend, up from 46% in 2Q24. 

Notably, 53% of O365 users expect to adopt the premium E5 tier next year, the highest level recorded in Morgan Stanley’s dataset.

The extent of adoption for Microsoft’s GenAI suite is “robust,” with 97% of CIOs planning to leverage at least one AI tool from Microsoft in the next 12 months. 

Furthermore, the bank said that the adoption expectations rose across the board, including GitHub Copilot, Security Copilot, and Dynamics 365 Copilots.

Morgan Stanley remains Overweight on Microsoft, calling it “a key Generative AI winner.”