Microsoft is reportedly suffering huge losses from GitHub Copilot
GitHub Copilot reportedly cost Microsoft a lot of money, reaching $80 per user per month in some cases, as it struggles with the challenge of turning its AI assistant into a profitable business.
The Wall Street Journal reports that these numbers come from anonymous insiders familiar with the company. It said Microsoft’s ownership of the platform resulted in an average loss of $20 per month per user in the first few months of 2023.
The company has not yet responded to our request for clarification, so it remains unclear whether its financial position has changed positively since then.
GitHub Copilot offers incredible value from a user perspective. This isn’t the first time Microsoft’s profitability has come under scrutiny, with unredacted court documents revealing earlier this year that Azure was significantly less profitable than AWS.
GitHub Copilot uses GPT models developed by OpenAI to help developers solve coding problems.
Microsoft’s significant investment in this AI startup has resulted in a variety of AI tools being made available across the company’s various businesses, including Microsoft 365 Copilot. This includes AI-enhanced office software that costs $30 per month, which is significantly more expensive than traditional office software (subscription without AI support).
Artificial intelligence is based on models that can process large amounts of data at high speeds, but their operation requires large amounts of resources such as electricity and cooling water. Data centers, whose environmental impact is already under scrutiny, require more powerful and expensive components to meet this growing demand.
Various companies have implemented strategies to control spending, such as setting limits on the number of prompts a user can use within a month. Nevertheless, GitHub Copilot’s price currently appears to be well below its actual cost, offering customers good value for money.
