Microsoft’s GitHub Copilot, the AI-driven coding assistant, has been in the spotlight due to reports indicating that it’s costing the company up to $80 per user per month, raising questions about its profitability.
Information from an undisclosed source familiar with Microsoft’s operations suggests that the company-owned platform was experiencing losses of approximately $20 per user per month during the early months of 2023. However, it remains uncertain whether the financial situation has improved since then, as Microsoft has yet to provide clarification on the matter.
This is not the first instance where Microsoft’s profitability has been scrutinized. In June, unredacted court documents revealed that Microsoft’s Azure cloud computing service was less profitable than its rival, AWS (Amazon Web Services).
GitHub Copilot leverages GPT models developed by OpenAI to assist developers in solving coding challenges. Microsoft has made significant investments in AI startups, including OpenAI, and has integrated their models into various AI tools across its portfolio. For instance, Microsoft 365 Copilot, which aids with office software tasks, costs users $30 per month—a notably higher subscription fee than standard office software offerings without AI assistance.
Artificial intelligence relies on models capable of rapid processing with billions of parameters, but this requires substantial resources, including power and cooling. Data centers, already under scrutiny for their environmental impact, are being equipped with increasingly powerful and costly components to handle these demands.
To manage costs, some companies have introduced measures such as imposing limits on the number of prompts that a worker can use in a given month.
For now, GitHub Copilot appears to be significantly underpriced, offering excellent value for its users. While Microsoft grapples with profitability challenges, customers continue to benefit from this AI-driven coding assistant.
