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.
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.
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.