My enterprise is deep into Microsoft AI but has essentially paused a lot of activity because Microsoft can’t explain their pricing model. They literally said that in a meeting.
So in a company with 10Ks of employees, that is willing to give everyone AI licenses, we can’t really build apps or agents with AI because we have no forecasting guidance on token costs over time.
Not sure how Microsoft thinks customers will react to that, but I know how ours did. The product was sold, and it’s now sitting on the shelf.
AI build out is just a way for cloud providers to keep customers since you can't get hardware for your own on-prem setup
What does this mean in the larger landscape though? Every company is using AI or trying it out, are they not using the cloud services for it? If so is it still not a big enough pie to show?
It means it is very fragile. Now if you consider that this probably Nvidia's money doing a circuit, it looks even more dicey.
If Microsoft only has 1 customer, and that customer blows up/fades away, what happens to all their capex?
What about Google and Amazon I wonder ?
How much of their cloud/AI revenue is organic reflecting actual business usage, and how much from Anthropic, especially for Amazon ?
It's largely the same. And it's Jensen circular deals that providing the cash in the first place.
It's still funny how their docs are such a mess even AI gets lost in them
The AI ouroboros. This is going to crash like Enron.
It’s a little worrying when larger news outlets start picking up on what Zitron has been saying:
https://www.wheresyoured.at/the-ai-demand-bubble/
AI as a tool is useful and will stick around but the funding acrobatics along with 0 moat is going to end with some major losers.
If that worries you, you'll be aghast at the fact that Ed's actually been on Bloomberg TV a couple times now.