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GitHub Copilot, an AI-powered coding tool developed by GitHub and OpenAI, has reportedly reached $100 million in annual recurring revenue (ARR), making it the first generative AI product to achieve this milestone. This success highlights the growing significance of AI technology in the market. Despite this achievement, it has been revealed that Microsoft, which owns GitHub, is losing an average of $20 for every $10 subscription to GitHub Copilot. According to the Wall Street Journal, Microsoft would need to either increase the price significantly or reduce expenses significantly in order to break even. The high cost is attributed to the expensive computational requirements of running the AI models, particularly the Transformers. Despite the financial losses, GitHub Copilot has proven to be valuable to users, with more than 1.5 million people having used it and it assisting in the creation of nearly half of Copilot users' code. This demonstrates the potential and value of the tool, providing room for adjustments in pricing and expenses to achieve profitability.
Transformers are still quite expensive to run! Reporting in the WSJ recently: Microsoft is "losing on average more than $20 a month per user" with Github Copilot. https://t.co/ITD4gyHUC5
Microsoft reportedly runs GitHub's AI Copilot at a loss https://t.co/lwg9a87TkJ
🤖 GitHub Copilot charges $10/user/month. But loses $20/user/month on average (per WSJ). For Microsoft to merely break even, they'd need to triple the price or slash expenses by 2/3. Remember: you can't offset poor unit economics with volume. https://t.co/6obKfd6v4Q
Microsoft Lost an Average $20 for Every $10 GitHub Copilot AI Sub: Report https://t.co/qfnFxV8P9R https://t.co/WMsLJtKuFX
it’s official - I think GitHub Copilot is the first* generative AI product to publicly claim they’ve passed $100m ARR — enough to stand alone as a publicly listed company Whenever people ask me “is AI a fad” the biggest thing I point to is “follow the money”: - revenue, not… https://t.co/tVjCzkzdpZ https://t.co/8sxqWKrOX0
I see AI folks tweeting about how Copilot lost money at $10/month earlier this year. But not enough on this part: “more than 1.5 million people have used it and it is helping build nearly half of Copilot users’ code” That is crazy value to price against, lots of wiggle room. https://t.co/TCkFNUpM4J