Windows Weekly 952: You Can See the Edges of the Bubble

Podcast: Windows Weekly (TWiT)
Date: October 1, 2025
Hosts: Leo Laporte (A), Paul Thurrott (B), Richard Campbell (C)

Episode Overview

This episode dives deep into a pivotal, transitional moment for Microsoft, tackling the peculiarity of the Windows 11 25H2 release (or lack thereof), high-level internal reorganizations at Microsoft, rampant AI feature proliferation (and skepticism), a slew of big Xbox news, and a thoughtful side discussion on the AI "bubble." From the ground-level experience of Windows updates to the global implications of AI data centers, Paul and Richard offer hard-earned industry insight, sprinkled with trademark candor and humor.

1. The Mystery and Monotony of Windows 11 25H2

[02:11 - 16:56]

• A Non-eventful Update

  • 25H2 rolls out—but there’s almost zero difference from 24H2. “The only difference is the one character in the build number and then the version number that says 25 instead of 24H2. So they are literally identical.” (B, 04:17)
  • Most new features are rolling out continuously and are NOT exclusive to either build; feature availability is inconsistent across devices.

• Frustration with “non-deterministic” feature delivery

  • “If you're on, like you have ADHD or compulsive in any way… this kind of thing makes me insane.” (B, 07:38)
  • End-users find different features enabled/disabled on different machines, regardless of build.

• Microsoft’s Spin vs. Reality

  • The official documentation boldly markets minor features as “new,” though insiders know otherwise.
  • Third-party tools (like Vive Tool on GitHub) can help, but feature enabling is still patchwork and mysterious.

Notable Quote

“It's worse than non-deterministic. It's like chaotically random… Not funny, not amusing. But you bring up [your devices] and get them up to date, they're all in the same build—except for one… and they all have different features.” —Paul Thurrott [08:25]

2. Windows Engineering Reorg, Leadership Shifts & Strategic Implications

[10:49 - 24:38, 60:07 - 66:48]

• Pavan Davuluri’s Promotion & the Reunification of Client & Core Engineering

  • Windows leadership shifts: Pavan promoted to President, merges “client” and “core” (kernel, drivers, etc.), realigning for an “AI version of Windows.”
  • The move brings technical adults (“adults” refers to engineering leadership) back to Windows from Azure—likely in preparation for a “major new version of Windows coming” (C, 12:18).

• Strategic Meaning

  • Unified leadership means Windows client can move faster, especially for AI features that don’t make sense on Server/Azure.
  • Hints that Server is less important for Azure as Linux dominance grows.

• Microsoft’s Ongoing Reorgs

  • Recent wave of promotions (EVPs to Presidents).
  • Satya Nadella carves off more technical duties, shifting Judson Althoff into a quasi-COO role over global sales & operations (B, 60:09).
  • Emphasis on flat hierarchy, “focus,” and “leading by example” through the shakeup.

Notable Quote

“Imagine updates making sense. Like if there's a unified strategy for Windows, maybe it's a unified strategy for updates and insiders. Too much to wish for?” —Richard Campbell [16:56]

3. Windows 10 Extended Security Updates, EU Pressure, and E-Waste Debates

[31:28 - 36:03]

• Windows 10 Support Extension
  • Extended Security Updates for individuals are now free in the EU (compelled by regulation).
  • Fierce debate about whether Microsoft should extend support for everyone worldwide (“If the EU is forcing this, underscores the fact that Microsoft can do it.” —A, 34:13).
  • Paul questions why critics only target MSFT rather than Apple, Google, etc. when it comes to e-waste concerns.

4. Qualcomm Snapdragon Summit: Major ARM Chip Advancements

[39:46 - 49:55]

• Second-Gen Snapdragon X Debuts

  • Paul attended the Hawaii summit: “Major double-digit improvements across all the core types: CPU, GP, NPU.” (B, 41:20)
  • Apple M4 is finally matched in performance by Qualcomm chips, but M5 is on the horizon.

• “Proof in the Pudding”

  • Chips are “2x faster than everything else” in GPU and efficiency, but real performance will come once hardware ships in 2026.

• Future Hardware and Practice

  • Real-world workflows (e.g., photo-to-notes via Pixel + Win11’s Phone Link) now “just work.”
  • Should be a game-changer for ARM-based Windows experiences in 2026.

5. Cloud, Azure, and Industry Collusion

[49:55 - 52:46]

• Industry Legal Dramas
  • Qualcomm wins major lawsuit vs. ARM; more litigation ahead (e.g., accusations of ARM lying on the stand).
  • Discussion of Google and Apple’s apparent “keiretsu” collusion—coordinated responses to regulations like the EU’s DMA.

6. AI Bubble Analysis: Market Saturation & Social Consequences

[92:04 - 100:46]

• Explosive AI Growth—But is it All Hype?

  • Massive data center build-outs for AI—communities are increasingly rejecting data centers due to noise, power, water consumption, industrial zoning, and minimal local benefit.

• Cory Doctorow’s “AI is Asbestos” Analogy

  • AI is, at best, an overblown hype cycle that, when it bursts, will leave us with more damage than help:

    “AI is the asbestos we are shoveling into the walls of our society and our descendants will be digging it out for generations.” —Cory Doctorow [93:07]

• The “ChatGPT Effect”

  • In the public mind, “AI” means ChatGPT (even amongst non-technical audiences).
  • Microsoft Copilot has little mindshare; ChatGPT is a runaway consumer hit.

Notable Quote

“You can see the edges of the bubble now. Sooner or later it pops.” —Richard Campbell [100:30]

7. Microsoft 365 Copilot and Consumer AI Subscription Shakeup

[70:47 - 90:07]

• New Microsoft 365 Premium

  • New “Premium” tier replaces Copilot Pro, same $20/mo price, bundles all Office family features plus Copilot—BUT only the account holder gets AI.
  • “To me, what this thing should have been was family, but AI for everybody.” —Paul Thurrott [72:16]

• Copilot Struggles to Gain Traction

  • Cites Ed Zitron’s analysis: only 8 million Copilot subscribers out of hundreds of millions of M365 users (<2%).
  • Microsoft positions Premium aggressively against ChatGPT+.

• The “Three App Models” for AI Evolution

  • Stevie Bathiche’s model: AI appears “beside,” “inside,” and “outside” your apps.
  • We’re moving from sidebars (beside), to embedded helpers (inside), to full agent-driven tasks (outside).

    “We’re going to have all these things, just like you have native apps... AI will be promoted, accessed, used in multiple ways.” —Paul Thurrott [82:56]

8. Orchestration, Agents, and Local vs. Cloud AI

[105:09 - 116:52]

• Insights from Stevie Bathiche

  • The ultimate goal: “Windows as an orchestrator for AI.”
  • Current “code around models is brittle.” The future: orchestration moves into the model—“the LLM ends up eating the structure around them, including the orchestrators.” (B, 112:12)
  • Simpler, smaller, highly-optimized models for specific tasks (settings agent in Windows 11).

• Identity in AI/Agents

  • Customers want personas; first steps include Copilot Portraits (cartoon avatars).
  • Skepticism about voice customizations and anthropomorphizing AI.

9. Xbox: Subscriptions Upended, Cloud Gaming, Console News

[121:40 - 150:50]

• Game Pass Changes and Price Hikes (Effective October 2025)

  • New tiers (Core, Premium, Ultimate); day-one releases restricted to Ultimate only.
  • Ultimate sees a major price jump to $29.99/month—a 50% hike.
  • Cloud gaming (formerly Project xCloud) moves out of beta, included across all Game Pass tiers.

• Handhelds, Custom Windows for Gaming

  • ASUS Rog Ally launches ($599/$999), powered by new AMD Z-series chips, with a custom, slimmed-down Windows interface designed for gamepad navigation.

• Console Retail & Cross-Platform Shifts

  • Costco drops Xbox consoles from retail.
  • Major Xbox titles (e.g., Flight Simulator 2024) coming to PlayStation 5.

• Industry Reflections

  • Gaming subscriptions are more expensive, industry is shifting, users are getting better at canceling.

Notable Quote

“This is going to be a gut check moment for a lot of people. I've already seen an astonishing amount of negative feedback to this.” —Paul Thurrott [130:48]

10. Odds & Ends: Security, Browsers, and Whiskey

[153:33 - end]

• Pragmatic Consumer Tips

  • If you’re a gamer, check Amazon Prime Gaming/Epic Store for freebie games.
  • Indie games remain good value.

• Browser & App Updates

  • Brave surpasses 100 million users. ProtonMail revamps mobile clients.

• RunAs Radio Highlight

  • Troy Hunt discusses “Have I Been Pwned” risk assessment tools.

• Whiskey Segment

  • Richard spotlights Compass Box Velocor—a rare blended malt with the aroma of old bookstores ($400+ a bottle), crafted as “the strange wistfulness of used bookstores… each filled with thousands of old books you’ll never have time to read.”

Key Quotes & Memorable Moments

• [04:17] “They are literally identical.”—Paul on 24H2 vs 25H2
• [07:38] “This kind of thing makes me insane.”—Paul on chaotic Windows feature rollouts
• [08:25] “It's worse than non-deterministic. It's like chaotically random…”
• [16:56] “Imagine updates making sense.”—Richard
• [34:13] “The EU’s forcing this underscores the fact that Microsoft can do it.”—Leo
• [41:20] “Major double-digit improvements across all the core types: CPU, GP, NPU.” —Paul
• [49:55] “Winning a court case is like winning an earthquake. Nobody’s winning anything.”—Richard
• [72:16] “To me, what this thing should have been was family, but AI for everybody.”—Paul
• [82:56] “We’re going to have all these things… AI will also be promoted, accessed, used in multiple ways.”—Paul
• [100:30] “You can see the edges of the bubble now. Sooner or later it pops.”—Richard
• [112:12] “Turns out we probably just want to move the orchestrator into the model.”—Stevie Bathiche (via Paul)
• [130:48] “This is going to be a gut check moment for a lot of people.”—Paul on Xbox Ultimate price jump

Timestamps for Important Segments

• 02:11–16:56: Windows 11 25H2’s pointlessness and chaotic feature delivery
• 10:49–24:38: Windows leadership reorg, historical context, and kernel debate
• 31:28–36:03: Windows 10 extended support, EU regulatory pressure
• 39:46–49:55: Qualcomm Snapdragon Summit, ARM Windows hardware future
• 60:07–66:48: Satya Nadella’s role change, Microsoft internal org shifts
• 70:47–90:07: M365 Copilot subscription, market competition, user adoption rates
• 92:04–100:46: AI bubble, data center impacts, Doctorow’s “asbestos” analogy
• 121:40–150:50: Major Xbox/Games Pass shakeups, cloud gaming, hardware announcements, industry context
• 153:33–end: Tips, browser news, Troy Hunt interview, Richard's whiskey pick

Conclusion

This episode paints a portrait of Microsoft in “bubble" territory—AI hype combusts, product changes outpace user education, and subscription pricing tests consumer loyalty. Core system changes are gestating beneath the surface, but externally, updates appear indistinguishable, and Microsoft’s legendary customer confusion remains unchecked. Meanwhile, the show’s hosts keep things sharp, grounded by real-world experience, skepticism, and dry wit—the kind of analysis every Microsoft watcher, admin, or enthusiast needs.

For further details or quotes, reference the indicated timestamps.