Microsoft has released another Copilot advertisement, this time with a holiday theme featuring Santa Claus and festive home scenes. The 30-second spot shows people using Copilot to handle tasks like syncing holiday lights to music, scaling up recipes, and checking HOA rules for outdoor decorations. But behind the cheerful visuals lies a growing concern: the ad appears to depict scenarios that don’t actually work as shown. In one scene, a user asks Copilot to help sync their holiday lights to music. The ad shows a website called Relecloud, which is not a real company but a fictional one Microsoft often uses in demos—similar to Contoso in past case studies. When tested, Copilot struggled to guide users through the process. It highlighted non-existent buttons, hallucinated a green “Apply” button that was actually just a lighting preset, and often claimed to have highlighted elements when it hadn’t. Using the real Philips Hue Sync app, Copilot correctly identified the Music tab and the “Start light sync” button at first. But it soon began inventing buttons, pointing to features that didn’t exist, and repeatedly claiming to highlight items on screen—despite no visual cue appearing. The cursor highlight feature, while useful in theory, is slow and lingers long after the advice has changed. Other prompts in the ad go unanswered. When a user asks to “help figure out these instructions,” Copilot misidentifies parts of an Ikea Kallax shelf manual, mistaking dowels for screws and page numbers for step numbers, making the guide nearly impossible to follow. For a recipe scaling task, Copilot correctly calculated the multiplier needed to go from six to 14 servings, but then failed to complete the full list. It mistook “2x” and “3x” buttons for increment controls and kept insisting they were for fine-tuning, even though they’re not. When asked to generate a full scaled recipe in a document, Copilot promised to do so but did nothing. The final scene features Santa asking why toy production is behind. Copilot jokes that elves are drinking too much hot cocoa—a playful nod to the ad’s absurdity. But the real issue may be deeper: the ad uses AI-generated images and fake documents, including a fictional HOA guideline and a giant inflatable reindeer encroaching on a neighbor’s yard. When tested, Copilot could detect the rule about property lines but gave vague, non-actionable advice, often deferring to the user’s judgment. These failures suggest that the ad is not showcasing real functionality but rather a curated fantasy. Microsoft insists that Copilot’s responses in the ad were real, just shortened for brevity. But the evidence shows that the AI often hallucinates, misidentifies elements, and fails to follow through on basic tasks. The campaign may be a clever marketing tactic, but it risks building unrealistic expectations. Believing Copilot can do all these things is as unlikely as believing in Santa. The truth is, the AI is still far from the seamless, reliable assistant the ad portrays.