Windows Weekly 969: "The Hidden Sweatshop"

Date: February 5, 2026
Hosts: Leo Laporte, Paul Thurrott (from Mexico City), Richard Campbell (from Stockholm)

Overview

This episode dives deep into Microsoft's latest earnings report, the evolving state of Windows 11 (and the culture and leadership around it), controversial "enshittification" features, AI strategy and monetization, and rich tales from the world of whisky distilleries. The hosts analyze technical, business, and user experience shifts happening in the Microsoft ecosystem, question decisions about AI and advertising, and even debate economic philosophy—all while maintaining a candid, self-aware, and often humorous tone.

Key Discussion Points & Insights

1. Microsoft Earnings & The Windows Ecosystem

• Satya Nadella's Announcements:
  • Windows 11 surpassed 1 billion users.
    • "Satya Nadella does his kind of prepared remarks... At one point he says, oh, and by the way, we passed the 1 billion user milestone for Windows 11." —Paul (03:12)
  • Reached this mark faster than Windows 10, despite mixed user sentiment and no heavy-handed force like with Windows 10 upgrades.
• Changing Importance of Windows:
  • No longer at the center of the tech world; Windows is now just one component inside Microsoft.
    • "Windows used to wag Microsoft and now it doesn't." —Richard (06:41)
• Leadership Transition:
  • Pavan Davaluri as new Windows lead, emphasizing quality and fundamentals.
    • "We're going to focus on some pain points this year which include such things as system performance, reliability and the overall experience." —Paul quoting Pavan (07:30)

2. Quality, Security, & “Enshittification” of Windows

• Insurification/Enshittification Trend:
  • Emerged gradually: first ads in Windows 8, escalated with forced telemetry, bundled crapware, pushy updates, relentless OneDrive/Edge upsells, and dark UI patterns.
    • "I've been complaining about what we now call the insurification of Windows for years... forced telemetry, crapware... Windows as a service." —Paul (08:36 & 22:01)
• New “Quality Initiative”:
  • Two new Microsoft EVPs focusing on security and engineering quality, possibly spurred by recent high-profile security incidents and complaints from big customers.
    • "Charlie Bell has moved over to a new position... It's really engineering quality, right. That's the job." —Paul (16:20)
    • "I think this might be tied to this Windows Quality initiative here..." —Paul (17:39)
• Specific User Experience Frustrations:
  • Default apps: Microsoft makes it increasingly difficult to set Chrome/other browsers as default, owns links from Start and Widgets (always opens in Edge).
  • Forced OneDrive folder backup: System now switches it on even when you decline, only letting you disable it with convoluted maneuvers.
    • "OneDrive folder backup, forced usage, which would be comical if it wasn't so stupid or terrible..." —Paul (31:43)
    • "You should use OneDrive. Yeah, yeah, yeah, I don't want it. And then... it was backing everything up." —Paul (32:31)
  • Monetization drive: Apple and Microsoft now aim to squeeze more revenue from users via subscriptions, services, and dark patterns.
    • "Returns on your hardware have gotten small. So Microsoft understandably would like to monetize its users more. Right. Apple's doing this right now with the services thing." —Paul (33:33)
  • “Insurification” as Cory Doctorow’s coined term for this trend:
    • "Doctorow made up a name for it... Reverse Centaur?" —Paul (34:04)
  • Open source as the “hidden sweatshop”:
    • "This is the hidden sweatshop that is open source..." —Paul (35:28)

3. AI Features & Strategy: Debate and User Backlash

• Microsoft’s AI Push:
  • Copilot and other AI features, often restricted to specific hardware (“Copilot+ PCs”), leading to user confusion and frustration.
    • "So many [AI features] are tied to specific computers, Copilot plus PC computers. And I feel like that creates an unnecessary verification of this market, which I think is terrible." —Paul (13:38)
    • "Why are we relegating things to certain types of computers? ... I'm not going to get them out to 90% of the market in a year. This is something that happens over time." —Paul (14:39)
• User & Community Feedback:
  • Highly negative (“visceral”) reactions among enthusiasts to Windows AI improvements, partly because of “AI overload” and the feeling of features being for features’ sake.
    • "The reaction to AI in many quarters has been viscerally negative. Microsoft is partially responsible for this." —Richard (37:22)
  • AI ties to monetization: some AI features gated behind Microsoft 365 Copilot or premium subscriptions, but majority of users show little interest or awareness.
    • "I'm going to go out in a limb... I bet 80 plus percent of those people have no idea they're even buying such a computer. And if they do, they're not buying it for any one AI feature..." —Paul (39:17)
• Microsoft’s Strategic Pivot:
  • Review of AI roadmap and possibly pulling back on controversial directions, with Pavan publicly stating the focus will return to performance, reliability, and user experience.
  • Skepticism remains: Will improvements materialize, or is this a PR-calibrated, temporary retreat?

4. Product Rollouts, Patch Cycles, and Beta News

• Windows 24H2/25H2/26H1 development:
  • Major under-the-hood changes in 24H2—essentially a new OS (“Windows 12 in everything but name”), big push to put all users on the same codebase regardless of nominal version.
    • "24H2 was a blowout, big thing... this was the time when they started doing... functionally 23H2, 24H2 are going to be the same." —Paul (27:58)
• Sysmon Integrated into Windows:
  • Sysmon (from Sysinternals toolkit) now an optional install for admins—a “godsend” for tracking OS activity.
    • "Sysmon... is now a lot easier to install. So it's actually an optional features, like more Windows features..." —Paul (67:07)
• Other Patch/Build News:
  • Smart App Control now easily toggleable, improvements to Windows Hello ESS, MIDI support, cross-device resume.

5. Earnings, Growth, and Economic Scrutiny

• Insane AI Infrastructure Spend:
  • Microsoft AI infra costs up 66% YOY; $81.3 billion in revenue, $38.5 billion net income, but much of that deployed into infrastructure with future returns based on “promises.”
    • "This is like... we have spent money here and over here. We're betting, literally betting, this is gambling that money will come in..." —Paul (71:54)
• Wall Street Pushback:
  • "Biggest wealth wipeout" in Microsoft history as stock drops $357 billion after earnings call due to AI spend skepticism.
    • "Microsoft lost $357 billion of value in less than 24 hours. That is the biggest wipeout of financial wealth in that company's history." —Paul (73:58)
• Cloud Giants Compared:
  • Apple’s iPhone revenue alone beats all of Microsoft’s. Google, Amazon, and Meta face similar scrutiny, but Apple “immune” due to minimal AI investment and massive service margins.
• Xbox Sales Shrink:
  • Xbox hardware revenue down 32% YOY, services/content down 5% even in the holiday quarter, seen as “a disaster.”

6. Open Source and the “Hidden Sweatshop” Theme

• Open Source Burnout:
  • Reference to the developer behind sudo seeking relief after 30 years of unpaid stewardship:
    • "This is the hidden sweatshop that is open source. ... 30 years later, all of that." —Paul (35:28)
• Economic Reality for Platforms:
  • With Windows and similar platforms becoming "free," all monetization now depends on add-on services and upselling users.

7. AI Ecosystem: Fragmentation and "Wild West" Era

• Anthropic and Ad-free AI:
  • Anthropic runs Super Bowl ads promoting their ad-free model—spending $8 million for every 30 seconds (98:58).
• AI Marketplace and Content Licensing:
  • Microsoft launches a Publisher Content Marketplace, seeking to retroactively give publishers a way to license to AI.
• Opacity vs. Portability:
  • AI user “settings” (e.g., agents.md file) are already portable across providers—stickiness might vanish.

8. Tips & Memorable Practical Advice

• How To Bypass Forced OneDrive Folder Backup

  • Step-by-step “incantation” to defeat OneDrive auto-backup on first login (120:28)
    1. After setup, watch the system tray for OneDrive icon (with a line through it).
    2. Wait (don’t click immediately).
    3. When the line disappears, open settings > Manage Backups. The yellow “getting things ready...” banner appears with a cancel link — use it now or lose your chance.
    • "If you don't do exactly what I just said, it will not be there. I've never made it happen otherwise." —Paul (120:30)

• Top Free/Low-cost Password Managers

  • Bitwarden and Proton Pass: only solid free options; Bitwarden is open source and user-supported; avoid former sponsor “the L word.”
    • "There is only one viable option in the free tier... Proton Pass, and that's Bitwarden." —Paul (123:03)

Quotes & Memorable Moments

• On Enshittification
  • "I've been complaining about what we now call the insurification of Windows for years and years and years." —Paul (08:36)
• On Open Source Maintenance
  • "This is the hidden sweatshop that is open source." —Paul (35:28)
• On User Control
  • "The disrespect of your explicit choice to me is just the bridge too far." —Paul (50:08)
• On AI Pushback
  • "The reaction to AI in many quarters has been viscerally negative. Microsoft is partially responsible for this." —Richard (37:22)
• On Quarterly Results
  • "Microsoft lost $357 billion of value in less than 24 hours. That is the biggest wipeout of financial wealth in that company's history." —Paul (73:58)

Timestamps for Key Segments

• Microsoft Earnings & Windows 11 Growth: 02:47–07:30
• Leadership & "Quality" Shift: 07:30–20:00
• Inshittification, Edge & OneDrive Frustrations: 22:01–51:38
• AI Strategy & Market Backlash: 13:33–39:17, 62:59–81:26
• Patch Cycles & Sysmon Integration: 65:13–68:41
• Microsoft AI Infrastructure Spending Debate: 71:07–78:28
• Open Source: 30yrs of Sudo/"Hidden Sweatshop": 35:08–36:43
• Anthropic’s Ads & AI Market Discussion: 97:22–104:15
• Tips / Back of the Book: 120:18–125:13
• Richard’s Distillery Slideshow (Glendronach): 127:10–148:13

Tone

Direct, candid, and often self-deprecating. Equal parts technical critique, wry humor, and philosophical pondering. The hosts oscillate between tech insider analysis, practical advice, and lighthearted banter—even as they wrestle with the frustrations (and sometimes the futility) of modern platform life.

Conclusion

This episode is a wide-ranging, open-minded, and critical tour through Microsoft’s present and looming future: the talk returns again and again to trust, monetization, and the challenge of keeping a legacy platform relevant in a world dominated by cloud, AI, and relentless investor growth targets. For Windows power users, IT pros, and tech watchers, it’s equal parts cautionary tale and how-to guide—from OneDrive battles to navigating the latest security/AI regime at Microsoft. And as always, a little whiskey lore to keep things smooth at the finish.