Microsoft reportedly is losing lots of money per user on GitHub Copilot

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We have reported in the past on how the generative AI boom over the past year has generated huge profits for many companies. One of the biggest businesses to profit from the AI boom has been NVIDIA, which has seen demand for its GPUs by Microsoft and other companies for data centers go way up in 2023. That has resulted in huge profits and big stock rises for NVIDIA.

However, Microsoft has reportedly struggled to make money from its AI services. A new report from The Wall Street Journal claims to have info on how Microsoft has lost lots of money on GitHub Copilot, one of its first generative AI services.

GitHub Copilot first launched in June 2022, It allows developers to let the Copilot AI assistant help in writing code for applications and services. The service is available now for $10 a month or $100 for a year's subscription. . Verified students along with owners of established open-source projects can use GitHub Copilot for free.

The WSJ reports that since the launch, Microsoft has been losing tons of money on GitHub Copilot. It stated:

In the first few months of this year, the company was losing on average more than $20 a month per user, according to a person familiar with the figures, who said some users were costing the company as much as $80 a month.​

Microsoft plans to launch Microsoft 365 Copilot on November 1 for enterprise users. The AI service that will help with using the company's productivity apps like Word, PowerPoint, Excel, Outlook, and others will be priced at $30 a month per user.

Today's article claims that Microsoft has been looking into cheaper ways to run its AI services. One of them might be to make its own AI GPU instead of buying them from NVIDIA. A recent report claims Microsoft will officially announce such an AI chip at the Ignite conference on November 14.