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Microsoft and Google – Are investments in artificial intelligence worth it?  -News

Microsoft and Google – Are investments in artificial intelligence worth it? -News


Big tech companies made billions last year. But not really because of AI.

what is he talking about? Since the launch of ChatGPT last year, major tech companies have invested billions in the new technology. For example, Microsoft invested $13 billion in OpenAI, the company that invented ChatGPT. But are these investments worth it?

Business figures from major technology companies were waiting impatiently. For the first time, it has become clear that technology companies are growing, also thanks to artificial intelligence.

How much money do Microsoft and Google make through artificial intelligence? Maybe not much. Both tech companies say AI is largely responsible for their growth. However, the companies do not provide any specific numbers. They only show the cloud business, where the AI ​​area is located. At Microsoft, it grew by 20 percent to reach $25.9 billion, and at Google by 26 percent, to reach $9 billion.

Experts assume that artificial intelligence makes up only a small percentage of this. And the billions invested in new technology are far from paying off. However: The fact that there is little growth in this area after just one year (for example, Microsoft was able to gain about 17,000 new enterprise customers thanks to AI) shows that the AI ​​trend is slowly paying off.

How do big tech companies make money through artificial intelligence? With AI as a service. This means that they rent the computing power needed to run AI to other companies. If other companies want to train their own chatbot, their own AI, using internal data, they hire from Microsoft and Google, so to speak.

The company's AI products are still in the early days and haven't made any impact yet. For example, Microsoft's CoPilot, a type of digital assistant built into Microsoft Office products designed to help write emails and summarize meetings. This product has not been around for long and is only slowly gaining traction. It also costs companies $30 per employee, which is a hefty additional cost.

Do technology companies simply want to attract new business customers using the buzzword AI? It's also marketing, yes. There are companies that choose, for example, Microsoft Office products or cloud solutions because they then get a package with which they can conduct their first experiments with artificial intelligence. The latest figures show that big tech companies have actually been able to win new customers. According to Microsoft, for example, it has gained about 17,000 new customers who come to Microsoft just because of its AI solutions.

But technology companies also want to convince their investors: the billions invested in new technology should still be worthwhile. Also this year, tech giants plan to invest billions in expensive infrastructure around the data centers and supercomputers needed to power artificial intelligence.

AI is not cheap – how do technology companies finance their investments? The money they earn from their core business, for example Google from advertising revenues or Microsoft from Office products, is then invested back into AI. However, investments are so high that margins can be affected. That's why savings are made. Microsoft, Google, and Meta laid off thousands of employees last year. Not only because of artificial intelligence, but also.