Microsoft, Google, And Adobe Navigate AI's Profitability Challenge

Benzinga2023-10-10

ZINGER KEY POINTSTech giants struggle with high costs of monetizing generative AI tools.Microsoft's GitHub Copilot faces profitability issues due to operational expenses.Tech giants like Microsoft ...

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Companies are introducing AI-backed software upgrades with increased price tags to counteract these costs.The cost of operating these AI models has been a concern for customers. Adam Selipsky, CEO of Amazon.com Inc Web Services, noted the industry's broader dissatisfaction with the expenses of running AI models. The development and maintenance of AI products can be financially and time-intensive, lacking the economies of scale typical of standard software.Microsoft partnered with OpenAI to launch GitHub Copilot, a popular service among coders for its efficiency in programming. However, the service has not been profitable due to the high operational costs. Users pay a monthly fee, but the company's expenses per user exceed the subscription cost. Microsoft plans to charge an additional fee for its upcoming AI software upgrade, a strategy also adopted by Google.To manage costs, Adobe introduced a credit system for its AI image generator, Firefly. 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