Microsoft is reportedly incurring losses on one of its first generative artificial intelligence (AI) tools, GitHub Copilot, according to a new report from the Wall Street Journal citing multiple sources.
For those unaware, GitHub Copilot, which was first launched in June 2022, is powered by a generative AI model developed by GitHub, OpenAI, and Microsoft.
The AI tool analyzes the context in the file you are editing, as well as related files, and offers suggestions from within your text editor. It is trained in all languages that appear in public repositories.
Currently, there are two paid subscription plans available for GitHub Copilot, which are: the Individual Plan, which costs $10 per month or $100 per year, and the Business Plan, which is priced at $19 per user per month.
However, ever since its launch, Microsoft has been losing tons of money on GitHub Copilot due to high operating costs, states the WSJ report.
“Microsoft used AI from its partner OpenAI to launch GitHub Copilot, a service that helps programmers create, fix, and translate code. It has been popular with coders—more than 1.5 million people have used it and it is helping build nearly half of Copilot users’ code — because it slashes the time and effort needed to program. It has also been a money loser because it is so expensive to run,” the publication notes.
As per the WSJ report, Microsoft-owned GitHub, on average, loses $20 per user per month, with some users costing the company as much as $80 per month. Considering that GitHub has over 1.5 million users, this converts to a significant monthly loss for the company.
In a related development, Microsoft announced that effective November 1, 2023, the company will be charging an additional cost of $30 per user per month for Microsoft 365 E3, E5, Business Standard, and Business Premium subscribers.
This means these customers will have to pay an extra amount of $30 on top of their standard monthly Microsoft 365 subscription fee (which varies by tier).
