Microsoft's early mover advantage in AI has run its course, and its shares have fallen by about 11% since their peak last October.

The company's quarterly results were disappointing, with capital expenditures coming in higher than expected, which led to a decline in shares in after-hours trading.

Microsoft is facing pressure to show a return on investment in AI, and its advantages in the industry are dwindling, with other companies like Google and Anthropic making significant progress.