Microsoft Urges Businesses to Count PC Refreshes as Part of AI Spending
A new way to budget for PCs
Microsoft wants enterprise customers to consider PC refreshes alongside AI investments, rather than treating them as a separate budget item. Mark Linton, corporate vice president for Windows and Device Sales, said the growing expense of using advanced AI models makes that approach more relevant.
Linton described a mix of large models for demanding tasks and smaller models running locally on Windows PCs. He said Microsoft hopes PC spending will become part of AI spending if Windows succeeds as an agent platform.
Costs are delaying upgrades
Higher component costs, driven by the expansion of AI datacenters, are contributing to delayed PC refreshes. Microsoft CFO Amy Hood said growth remains affected by elevated inventory, PC demand and a comparison with the previous year, which benefited from Windows 10 reaching end of support.
Omdia said higher costs for components have reached consumer prices, prompting consumers and IT decision-makers to respond. Many enterprises are stretching the life of their existing equipment while directing available funds toward infrastructure.
Microsoft makes its AI case
Microsoft’s pitch extends beyond Copilot and its own software, Linton said. The company wants Windows to support different AI models and agents, and says customers are seeking better productivity, lower costs, innovation, security and the ability to deploy at scale.
Linton also pointed to Microsoft Execution Containers, announced in June, as a way to virtualize agents and manage them through Intune policies. He said Windows could allow policy-based management, rather than requiring administrators to handle each agent separately.
Older PCs and uncertain demand
AI PCs have been difficult to sell, with higher prices and a shortage of compelling applications contributing to delayed purchases. Microsoft must persuade enterprise procurement teams and trade customers that the devices’ benefits justify an upgrade.
Linton estimated that customers own more than 400 million PCs that are over four years old. He said those machines lack the battery life or processing power for AI workloads, and expects demand to emerge when conditions stabilize and IT budgets improve.
Key points
- Microsoft wants customers to include PC refreshes in AI budgets.
- Rising component costs and tight IT spending are delaying upgrades.
- The company says Windows can run smaller AI models locally and manage agents through policies.
- Microsoft estimates customers have more than 400 million PCs over four years old.