And that brings us back to the original question: if you are going to fire even more developers to justify your AI spending because someone has to pay for it, then how are you going to save Xbox? An AI Xbox with AI-generated games aren't going to cut it, no matter what Microsoft says, although that might save a bit of money. And there's the imperturbable Sony, and the dark horse that is Valve to contend with.
Prediction: Xbox can't win this off the old playbook.