this post was submitted on 20 Sep 2024
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Don’t forget that Microsoft isn’t some dumb company trying to jump on the AI bandwagon. They’re a cloud provider and Azure provides lots of AI options.
Microsoft is one of the platforms raking in heaps of money from dumb companies trying to jump on the AI bandwagon. They’re the equivalent of the people selling MAGA shirts outside trump rallies.
True. But one of their biggest customers is OpenAI. A big part of Microsoft's investment in OpenAI comes in the form of free access to its data centers (which cost money to run, thus costing Microsoft in the short term). By taking advantage of OpenAI's non-profit status, Microsoft was able to write off a bunch of those losses early on as tax deductions.
But they're still losses.
Other firms using Microsoft to jump on the AI bandwagon might help make up the difference. But that's like saying "I'm only doing some of my own heroin, so I still come out ahead". Given the current rate of return on AI investments, the only truly correct investment value is $0.
That's a weird take. By that logic, the overall rate of return of Amazon as a company being negative for over a decade says that the only correct investment in Amazon was $0
Amazon is still comically weighted towards AWS. If you could choose which part of the business to own, it wouldn't be much of a contest.
But, by all means, give Jeff Bezos another billion dollars for his Blue Origin project. See what kind of return that gets you.