Microsoft Slumps on AI-Generated Answers Copyright Risk Uncertainty

Microsoft's shares slipped by approximately 0.8% to $493.84 on Friday, reversing part of Thursday's tech-led rebound.

The decline comes as news organizations unsealed parts of Microsoft and OpenAI executives' testimony in a summary-judgment filing related to copyright risks associated with AI-generated answers.

publishers are arguing that these answers can reduce the need for readers to visit original news sites, which could lead to lower traffic and licensing value. Microsoft pushed back, stating that individual views expressed by its executives do not determine whether its use of copyrighted material qualifies as fair use.

The court has yet to rule on the publishers' allegations, leaving the central copyright question very much alive. For investors, the real pressure point lies in the economics behind Copilot and AI search: if courts decide that answer engines erode publishers' traffic or licensing value, Microsoft could face higher content costs or changes to how its products surface information.

Microsoft's valuation also adds another wrinkle: at $493.84, it trades 15.66% below its GF Value estimate of $585.56, suggesting the shares already sit well below fair value despite copyright uncertainty hanging over one of Microsoft's biggest AI growth bets.