As artificial intelligence enters literally every aspect of life, a new report examines how businesses can profit from artificial intelligence. Although technology giants such as Microsoft, Alphabet, Adobe, Google, Meta and AWS spend a lot on artificial intelligence, the fact that customers do not pay enough actually simplifies this complicated issue: Artificial intelligence is currently a money burning machine.In most cases, expenses are twice as much as revenues.
A report compiled by WSJ talks about how Microsoft’s GitHub Copilot service is losing money. For those who don’t know, GitHub Copilot can be considered a software assistant created by Microsoft using OpenAI’s artificial intelligence models. The software giant GitHub offers Copilot as a $10-per-month subscription service, but it looks like Microsoft is losing $20 or more per month on each subscription. Some Copilot users even cost Microsoft up to $80 a month.
As those who follow us know, artificial intelligence requires extremely powerful systems that consume incredible amounts of resources. The answers produced by running complex mathematical models are naturally not cheap (See: ChatGPT’s daily cost). All technology giants continue to invest in hardware, software and energy (electricity, water, etc.) for artificial intelligence. So how sustainable is this situation?Prices are increasing: Artificial intelligence is the period of distribution with ration cards
It seems that companies are agreeing to shoulder these costs, but change is slowly beginning. Microsoft’s GitHub Copilot revenue-to-cost ratio does not look sustainable. We’ve previously seen companies like Microsoft take on such costs early in the product development cycle to establish a market, but the WSJ report shows that changes are already on the way. Reports suggest that both Microsoft and Google plan to increase prices for artificial intelligence-supported software and services.
Multiple pricing tiers and more limited AI access levels are also among the plans. There are different approaches in the artificial intelligence market. For example, it uses a monthly credit system to access Adobe’s Firefly AI renderer. This situation is kind of like rationing artificial intelligence.Companies are also looking at less powerful and cheaper AI tools to cut costs. The best example would be to use ChatGPT 3.5 instead of the latest GPT-4 when it is sufficient. Another way to reduce costs is to make hardware cheaper, more focused and efficient. Giants such as Microsoft, OpenAI, Google and Meta are already working in this field.
Considering all this, it is not surprising that investors are starting to look more cautiously at artificial intelligence investments. As we said in the news we published yesterday; Artificial intelligence is preparing to take a cold shower in 2024.
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