Why Microsoft is Moving Into a Lower Margin Business? | The Pirate Street Journal

The Pirate Street Journal · Sep 7, 2026 · 35m

HERE'S WHAT WE COVERED IN THIS EPISODE:

1. Microsoft just walked into the lowest margin business in tech on purpose.

Microsoft launched a new company called Microsoft Frontier. $2.5 billion, 6,000 engineers, sent inside other companies to make their AI work. That is consulting, the lowest margin business in tech. Microsoft is down about 20% this year and has shed over a trillion dollars from its peak while spending $190 billion on capital. Amazon put a billion into the same idea two years ago. OpenAI and Anthropic followed. Wall Street covers companies, not categories, so it read this as…