Microsoft, Google and others are experimenting how produce, market and invoice new tools. From a report: Microsoft lost money on one of its first generative AI products, a person with knowledge of the numbers said. It and Google are now launching AI-based upgrades to their software at higher prices. Zoom has tried to mitigate costs by sometimes using simpler AI developed in-house. Adobe and others impose monthly usage caps and charge based on consumption. “A lot of customers I’ve talked to are unhappy with the cost they’re seeing to run some of these models,” said Adam Selipsky, general manager of Amazon.com’s cloud division, Amazon Web Services, speaking of the sector. widely. It will take time for businesses and consumers to understand how they want to use AI and how much they are willing to pay for it, said Chris Young, Microsoft’s head of corporate strategy.
“We are clearly at a point where we now need to translate the enthusiasm and level of interest into real adoption,” he said. Creating and training AI products can take years and hundreds of millions of dollars, more than with other types of software. AI often does not provide the economies of scale of standard software because it can require intensive new calculations for each query. The more customers use the products, the more expensive it is to cover infrastructure bills. These operating costs expose companies that charge a flat fee for AI to potential losses.
Microsoft used AI from its partner OpenAI to launch GitHub Copilot, a service that helps programmers create, fix and translate code. It’s popular with coders – more than 1.5 million people have used it and it helps create almost half of Copilot users’ code – because it significantly reduces the time and effort required for programming. It also lost money because it is very expensive to operate. Individuals pay $10 per month for the AI assistant. During the first months of this year, the company lost an average of more than $20 per month per user, according to a person familiar with the figures, who said some users were costing the company as much as $80 per user. month.