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The big tech companies earned billions last year. But not really because of artificial intelligence.
What is it about? Since ChatGPT was launched 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?
The business figures of the big tech companies were eagerly awaited. For the first time it is clear that tech companies are growing, also thanks to artificial intelligence.
How much money do Microsoft and Google make with artificial intelligence? Probably not that much. Both tech companies say that AI is largely responsible for their growth. However, the companies do not provide any concrete figures. They only show the cloud business, where the AI area is located. At Microsoft it grew by 20 percent to $25.9 billion and at Google by 26 percent to $9 billion.
Experts assume that AI only makes up a small proportion of this. And the billions invested in the new technology are far from being paid off. And yet: The fact that there is slight growth in this area after just one year (for example, Microsoft was able to gain around 17,000 new corporate customers thanks to AI) shows that the AI trend is slowly bearing fruit.
How do the big tech companies make money with AI? With artificial intelligence 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 chat robot, their own AI, with in-house data, then they rent from Microsoft and Google, so to speak.
The company’s own AI products are still at the very beginning and are not yet making an impact. For example, Microsoft’s CoPilot, a kind of digital assistant that was built into Microsoft Office products and is intended to help write emails and summarize meetings. This product has not been around for long and is only slowly gaining momentum. It also costs companies $30 per employee, a hefty surcharge.
Do tech companies simply want to attract new corporate customers with the buzzword AI? It’s also marketing, yes. There are companies that choose, for example, Microsoft’s Office products or cloud solutions because they then get a package with which they can carry out their first experiments with AI. The latest figures show that the big tech companies were actually able to gain new customers. According to Microsoft, for example, it has gained around 17,000 new customers who only come to Microsoft because of AI solutions.
But the tech companies also want to convince their investors: the billions invested in the new technology should still be worthwhile. This year, too, the tech giants plan to invest billions in expensive infrastructure around data centers and supercomputers that are needed to operate AI.
AI is not cheap – how do tech companies finance their investments? The money that they earn from their core business, for example Google with its advertising revenue or Microsoft with its Office products, is then invested back into AI. However, investments are so high that margins could suffer. That’s why savings are made. Microsoft, Google and Meta laid off thousands of employees last year. Not just because of artificial intelligence, but also.