
This new piece was created in collaboration with The Marine Mammal Center! We have made signed prints available and a portion of all proceeds will go to them :)
This new piece was created in collaboration with The Marine Mammal Center! We have made signed prints available and a portion of all proceeds will go to them :)
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Microsoft is forecast to spend $80 billion on AI in 2025.Lets try to figure out the return on this investment. We will assume that the $80B is split two ways, $40B to Nvidia for hardware and $40B on building data centers to put it in. Depreciating the $40B of hardware over five years is very optimistic, it is likely to be uneconomic to run after 2-3 years. But that's what we'll do. So that is minus $8B/year on the bottom line over the next five years. Similarly, depreciating the data centers over 20 years is likely optimistic, given the rate at which AI power demand is increasing. But that's what we'll do, giving another minus $2B/year on the bottom line.
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Microsoft is today promoting the pay-as-you-go pricing model of Copilot Studio as the preferred sales motion. The list price of one message is $0.01. While enterprise clients may get discounts, there’s also the chance of prepaid message capacity being unused, so things may even out. With this price point, Copilot Studio usage generates $2.5M revenue per month, and $30M per year.So Microsoft is processing about 30B messages/year. It needs adoption to be so fast that next year's revenue will be around 1,100 times its current rate. They will need next year's customers to generate about 330T messages/year.
160k organizations using Copilot, this translates to around 1.5K messages per org per month. Or 52 messages per day. Now, we have to remember that one action in a Copilot Studio agent often consumes more than one message. ...The back of my envelope says that Microsoft's AI business needs to grow customers like no business (even OpenAI) has ever grown customers if it is not to be a huge drag on the bottom line.
If those 52 messages were only about regular GenAI usage without any business process logic, that would mean 26 responses from Copilot Studio agents per day. If they were to include things like agent actions (meaning, AI does something more than just chatting back at you) or AI tools, we’re quickly at a point where the average Copilot Studio customer organization does a couple of agent runs per day.
This is shockingly low. It is plain and obvious that most customers are merely experimenting with trying to build agents. Hardly anyone is running it in production yet. Which wouldn’t be that bad if this was a new 2025 product. But Copilot Studio has been out since November 2023.
To be abundantly clear, as it stands, OpenAI currently spends $2.35 to make $1.Lets assume Microsoft is doing better, with each $1 in revenue costing $1.50. But, as James O'Donnell and Casey Crownhart report in We did the math on AI’s energy footprint. Here’s the story you haven’t heard.:
As conversations with experts and AI companies made clear, inference, not training, represents an increasing majority of AI’s energy demands and will continue to do so in the near future. It’s now estimated that 80–90% of computing power for AI is used for inference.If we assume unrealistically that training is a one-time cost and they don't need to retrain for next year, training cost them say 15% of $45M, or about $6.75M and answering the 30B messages cost them $38.25M. Scaling up by a factor of 1,100 means answering the messages would cost them $42B plus the $10B depreciation, so $52B. But it would only generate $33B in revenue, so each $1 of revenue would cost about $1.58. Scaling up would make the losses worse.
Researchers have discovered a new way to covertly track Android users. Both Meta and Yandex were using it, but have suddenly stopped now that they have been caught.
The details are interesting, and worth reading in detail:
>Tracking code that Meta and Russia-based Yandex embed into millions of websites is de-anonymizing visitors by abusing legitimate Internet protocols, causing Chrome and other browsers to surreptitiously send unique identifiers to native apps installed on a device, researchers have discovered. Google says it’s investigating the abuse, which allows Meta and Yandex to convert ephemeral web identifiers into persistent mobile app user identities.
The covert trackingimplemented in the Meta Pixel and Yandex Metrica trackersallows Meta and Yandex to bypass core security and privacy protections provided by both the Android operating system and browsers that run on it. Android sandboxing, for instance, isolates processes to prevent them from interacting with the OS and any other app installed on the device, cutting off access to sensitive data or privileged system resources. Defenses such as state partitioning and storage partitioning, which are built into all major browsers, store site cookies and other data associated with a website in containers that are unique to every top-level website domain to ensure they’re off-limits for every other site.
Washington Post article.
Hovertext:
Fortunately it later finds some ants engaging in a simple form of market exchanges.