News Microsoft Lost an Average $20 for Every $10 GitHub Copilot AI Sub: Report

[Admin]

It is still early days for charging for AI services, but things need to change to create profitable and sustainable businesses.

Microsoft Lost an Average $20 for Every $10 GitHub Copilot AI Sub: Report : Read more

 

[Brian D Smith]

Gotta spend/lose money to make money...just ask Amazon and look where they are now.

 

[ezst036]

No wonder they are using CoPilot to add advertisements everywhere within Windows OS.

Microsoft Copilot is showing ads in Windows 11 now, too

Microsoft Copilot is the new AI service integrated into Windows 11 23H2. The feature is designed to become the new digital assistant for Windows users after Cortana's...

www.techspot.com

AI is indeed proving to be expensive and that's..... Hey did you know Nvidia is running a sale right now on RTX GPUs? /sarc

 

[Tim_124]

Gotta spend/lose money to make money...just ask Amazon and look where they are now.

Amazon never lost money per transaction. They had accounting losses, mainly due to plowing all their profits into expanding their infrastructure (warehouses and data centers) and taking depreciation on those, but they could have been “profitable” at any time if they scaled back their capital investments.

This is different. This is basically directly subsidizing each user. A closer comparison would be a social network like Facebook, where they ran in the red to build a user base that would eventually be large enough to derive enough ad revenue to be profitable. Even there it’s not a perfect analogy as the incremental cost of a new user was well below the revenue they could expect from them.

Here it’s just each user sucking up way more resources, in both hardware and power, than the revenue they provide. They can’t grow their way out of that as each new user brings in less revenue than incremental costs to support them.

 

[Giroro]

Microsoft would save a lot of money if they would fix their search engine.
They wouldn't need to be constantly re-generating custom answers to questions if we could simply find an already existing answer to our basic questions.

On another note, do you remember the 2001 movie "A.I. Artificial Intelligence"? There's a scene in that movie where the Jude Law had to pay an AI (played by Robin Williams) to get basic answers to simple questions.
That movie sucked. I don't want to live in that movie.

 

[jbo5112]

"It is known that some AI businesses are interested in making lower-power, cheaper, and more efficient processors to take on AI workloads."

Is there anyone who isn't?

 

[vehekos]

This is caused by the foolishness of unnecessarily moving computing to the cloud.

Users' computers could do most, -if not all-, of the processing, and even a portion of the preprocessing would alleviate the load on the servers.

 

[purposelycryptic]

It is still early days for charging for AI services, but things need to change to create profitable and sustainable businesses.

Microsoft Lost an Average $20 for Every $10 GitHub Copilot AI Sub: Report : Read more

They need more customers to distribute the fixed costs across, and then hold on to their customer base for dear life as hardware gets more efficient and costs drop.

Their costs per user are pretty much as high as they are going to get - this isn't the time to scare customers off with higher prices, but to bite the bullet and drag them in before someone else does. Costs will drop with time, as they do, and you can only raise your prices so often without serious repercussions. Right now, when they are still building their user base, is possibly the worst time to do so. You drive out current customers and scare off potential ones. They really need to wait until they actually have a proper userbase, and they have used it enough to make switching to someone else a bigger pain than the price increase.