Microsoft’s 3 billion bet on Copilot is assessed to be a disaster

[curl-6]

Chrkeller said:

sc94597 said:

I remember 5 years ago, during the pandemic, there were many predictions that there would be a collapse in delivery apps, because all of the delivery apps weren't making profits. Many industry analysts suggested that these companies would never become profitable and that it was impossible given the high operational costs.

Roughly around 2023-2024 they became profitable. 

This is a common trend in the tech industry. Companies make large losses over time, and then a decade or two out they start making large profits. 

Compute costs are going to decrease over time as infrastructure is built out and currently nascent technologies (high bandwidth memory and networking, photonics, etc) mature. 

100%.  It shocks me that people don't realize this.  Amazing bleed money for over a decade.  Apple almost went under more than once.  Nvidia was a small player for decades.  

Now all 3 are top 5 companies on the planet.

As I explained previously, this is not an apples to apples comparison; the likes of Apple, Amazon, and Nvidia always had a viable, functional business model and a clear path to profitability. By contrast, Open AI for instance doesn't even have a plan for how to become profitable: https://www.startupbell.net/post/sam-altman-told-investors-bluntly-he-had-no-plans-on-how-to-generate-revenue

According to JP Morgan, to achieve a 10% return on capital expenditure, the AI sector needs to generate about $650 Billion a year in revenue. The actual run-rate is about $25 billion. In other words, run rate is only about 3.8% what it needs to be to justify the costs.

Meanwhile, AI's contributions to the economy? "Basically zero": https://finance.yahoo.com/news/ai-contributed-basically-zero-us-181419807.html

Last edited by curl-6 - on 26 May 2026