Windows Weekly 956: “Blowing the Dust Off Skype”

Date: October 29, 2025
Host: Leo Laporte
Guests: Paul Thurrott, Richard Campbell

Episode Overview

This episode of Windows Weekly is a mix of wry humor and deep dives into the latest Microsoft news, with Leo Laporte, Paul Thurrott, and Richard Campbell discussing everything from Windows and Azure outages, Copilot, industry financials, product updates, the looming “AI bubble”, and some nostalgic chatter around Skype and gaming. The show’s hallmark blend of personal banter and informed analysis keeps even technical setbacks enjoyable for listeners.

Major Topics and Key Discussions

1. Azure Outage and the Fragility of the Cloud

[03:15 - 08:07]

• Azure’s downtime at the time of the show meant disruptions across Microsoft services, including Loop, Teams, and the ability to authenticate via Authenticator.
  • “Try to go to Microsoft.com and you can see how down it is. It's not doing good.” (Paul, 03:54)
• Broader implications: When cloud giants go down, a cascade of productivity halts, prompting debates about the reliability and centralization of cloud infrastructure.
  • “See, this is why the cloud is nonsense and we're all going back on prem, he says, from 18 years ago.” (Paul, 05:47)

2. Microsoft’s Quarterly Earnings & Big Tech Shell Game

[08:11 - 10:09, 139:41 - 145:12]

• Expectations leading up to the earnings (then delayed due to the Azure outage); focus on AI infrastructure spending—Paul guesstimates $25–28 billion for the quarter; actuals later revealed were $35 billion.
  • “The only thing I care about is how much they spent this quarter on AI infrastructure. And it's going to be between 25 and $28 billion ... but we'll see.” (Paul, 08:11)
• The panel discusses industry-wide financial maneuvering: tech companies investing in each other, inflating valuations, and cycling investments.
  • “There’s a big shell game occurring right now in big tech... we're just throwing out numbers.” (Paul, 08:30)
• Microsoft remains immensely profitable: $27.7B profit on $77.7B revenue this quarter, but CapEx on AI is outpacing income—a gambit that can only last so long.
  • _"27.7 billion is a big number, but 34.9 is a bigger number. And ... you're taking out a savings." (Paul, 142:55)

3. Windows 11 25H2 and “The Week D” Updates

[10:23 - 16:21]

• Leo and Paul both receive the new Windows 11 25H2 update “organically” despite cloud turmoil.
  • “Your life is about to change ... The big one is that the number in the OS will be a five, not a four.” (Paul, 11:46)
• Key UI Changes:
  • New Start menu (with sectioned “Pinned”, “Recommended”, and now “All” categories), a phone icon in the corner.
  • File Explorer: Pop-ups for quick actions on hover, third-party cloud storage integration.
  • Voice Access: Delay feature; improved search.
  • Battery icon color changes to indicate charge/health.
  • Settings “Email & Accounts” page is getting renamed for clarity.
  • Many features are feature-flagged/randomly rolled out, even on identical machines.
    • “These are controlled feature releases. Controlled is a hilarious word because it’s literally random. But you'll get them at some point or another.” (Paul, 22:36)

4. The State of Controlled Rollouts

[22:36 - 32:55]

• Even advanced users like Paul can’t force all new features active with ViveTool; cloud-controlled switches reign supreme.
  • “There's no master key. At least there isn't that anyone has discovered.” (Paul, 23:46)
• Most changes in builds are latent until Microsoft “lights them up.”
  • The panel is amused and frustrated by unintuitive, sometimes “random” deployment logic.

5. Microsoft 365 Update: Copilot Everywhere, Pricing Trouble

[41:44 - 45:16]

• Australia sues Microsoft for misleading millions about Copilot-enabled Microsoft 365 subscriptions and related price hikes.
  • “So [Microsoft] raised the price, they sort of forced people to pay more so one of them could get these copilot features but without really telling anyone.” (Paul, 44:30)
• Discussion of involuntary upgrades and “negative option billing”—regulators are not amused.

6. The “Invisible Hand” in Big Tech Financial Transparency

[46:17 - 49:00 & Throughout]

• Microsoft (and others) have stopped reporting unit sales, reveal less and less real data.
  • “You can't follow the money. ... I think that's the point.” (Paul, 47:54)
• The hosts excoriate both companies and the SEC for this trend, noting it’s impossible to gauge product lines’ actual health.

7. Copilot Mania: New Features & Event Recap

[83:32 - 92:53]

• Reviewed Microsoft’s “human-centered AI” Copilot event, hosted by Mustafa Suleiman.
  • Increased interconnectivity: Group chats (up to 32 people), cross-platform connectors (Gmail, Google Drive), upcoming proactive actions.
• Copilot in Edge: will soon perform actions “on your behalf.”
• Copilot’s relentless spread: now in Microsoft 365 Companion Apps, grounded in your enterprise data by default.
  • “Copilot is the cancer that will spread to everything we use.” (Paul, 50:33)

8. The New OpenAI-Microsoft Deal: “Recapitalized”

[63:19 - 72:14]

• OpenAI restructures: Non-profit owner, for-profit operating company; Microsoft now owns 27% (was 33% pre-revaluation).
  • “So Microsoft now owns 27% of that.” (Paul, 64:09)
• New 2032 timeframe for exclusive OpenAI model access; right-of-first-refusal for Microsoft is gone.
• $250b+ in future Azure contracts—numbers are both concrete and completely “fake money”.

9. The “AI is Just Normal Now” Argument

[145:20 - 148:58]

• Paul highlights a centrist academic viewpoint: Most useful AI fades into the background—spellcheck, grammar, search—“becomes normal.”
• Notes the value in distinguishing “AI-hype” (snake oil) vs “real value” as AI embedded in productivity tools.

10. Xbox News: The Profit Mandate, the Future is Windows

[110:40 - 132:56]

• Amy Hood (Microsoft CFO) has reportedly mandated that Xbox must achieve a 30% profit margin—a threshold never met by Xbox or most hardware-based game businesses.
  • “Xbox has never come anywhere close to having such a profit margin and most video game businesses haven’t either.” (Paul, 111:15)
• Implications: Hardware may shrink; next-gen console will reportedly be “very premium”; more focus on profitable publishing and cross-platform presence; hardware could transform into a more PC-like, possibly Windows-based experience.
  • “The next console they make will be very premium, kind of redundant and a curated experience.” (Paul, 120:32)
• Announcements:
  • Halo Campaign Evolved: New, UE-based remaster, cross-platform (even PlayStation 5!).
  • Amazon Luna pivots to “casual” cloud gaming after layoffs.
• Satya Nadella: Microsoft wants to be everywhere, with Xbox as publisher, not just hardware.

11. Personal, Fun, and Community Moments

• The crew reminisces about Skype (“Blowing the Dust Off Skype”), compares Zoom, Google Meet, Teams—amidst Azure downtime.
  • "Are you blowing on the Skype gears?" (Leo, 07:58), "Blowing the dust off the Skype." (Paul, 08:00)
• Extended comedic recounting of their Dungeons & Dragons session with TWIT Club members.
  • “It was like the moment you’re standing there and the monster appears and you’re like, you guys got my back, right? Guys? Guys?” (Paul, 54:01)
• Whiskey Corner:
  • Richard shares the story of the ultra-rare Redbreast Dream Cask PX edition, sipped with an old friend—an ode to whiskey collecting and friendship (151:21 - 163:13).
• Book/podcast picks:
  • Cory Doctorow’s “Enshittification”, the “AI Snake Oil” Substack/book.
• Regular digs at Microsoft’s random feature rollouts, and the modern tech world’s drift from product focus to shareholder performance.

Notable Quotes

• On Azure outage:
  "See, this is why the cloud is nonsense and we're all going back on prem, he says, from 18 years ago." (Paul, 05:47)
• On Big Tech Finances:
  "We're just throwing out numbers...essentially the symbol of a bubble is once you start doing this, you know you're at the bubble edge." (Richard, 09:16)
• On Copilot:
  "Copilot is the cancer that will spread to everything we use." (Paul, 50:33)
• On Microsoft's transparency:
  "You can't follow the money...and I think that's the point." (Paul, 47:54)
• On feature rollouts:
  "Controlled is a hilarious word because it’s literally random." (Paul, 22:36)
• On Xbox profit mandate:
  "This is it. Right. This came from on high ... everyone, including Satya Nadella, at some point answers to someone else." (Paul, 112:16)

Timestamps for Key Segments

• Azure outage & cloud reliability: 03:15 – 08:07
• Earnings, AI spend: 08:11 – 10:09; 139:41 – 145:12
• Windows Updates/25H2 changes: 10:23 – 16:21
• Controlled Feature Rollouts: 22:36 – 32:55
• Microsoft 365/Copilot/Antitrust: 41:44 – 45:16
• Transparency & SEC Critique: 46:17 – 49:00; throughout
• Copilot Recap: 83:32 – 92:53
• OpenAI-Microsoft Deal: 63:19 – 72:14
• Xbox’s Future/Profit Mandate: 110:40 – 132:56
• Whiskey Pick—Redbreast Dream Cask PX: 151:21 – 163:13

Tone, Language, and Style

The episode embodies the show’s trademark blend of technical expertise, sharp wit, and “inside baseball” industry chat. Paul’s cynicism about Microsoft’s direction, Richard’s deep-dives, and Leo’s easy hosting style provide both humor and clarity. The mood is collegial but critical—a cocktail of appreciation for “actual engineering” and skepticism towards the speculative, financialized era of tech.

Takeaways for Busy Listeners

• If you care about Azure or Microsoft 365: Outages can cause cascading issues; trust but verify your cloud vendor’s reliability.
• Windows 11: 25H2 brings minor user-facing changes, mostly under the hood, and feature releases are frustratingly randomized.
• Copilot is everywhere: Both wonderful and annoying; Microsoft’s main consumer play is pushing AI into all services, sometimes before users want it.
• Big Tech Bubble: There’s palpable anxiety about the sustainability of AI-driven investment, inflation of valuations, and the opacity of financial reporting.
• Xbox's Hardware Days May Be Numbered: Watch for a shift toward Windows-based, “ultra-premium” consoles and away from hardware as a loss-leader.
• Personal interactions and community fun (like Club TWIT’s D&D) remain a tonic to the occasionally overwhelming pace of change.

For full show notes, product links, and the in-depth whiskey segment, visit windowsweekly.com or find the playlist at somethingweirdfrommycloset.com