Microsoft is losing money on every GitHub Copilot subscription - WSJ

Microsoft is losing up to $80 per month on a single user of the GitHub Copilot service. At the same time, the cost of subscription is $10.

Here's What We Know

Copilot for GitHub was announced in 2022. It uses OpenAI AI models to help programmers code in IDEs and Visual Studio Code. In March, the tool was updated to GPT-3.5 and GPT-4.

Microsoft has been known to lose an average of $20 per month on a Copilot subscriber, with losses as high as $80 in some cases.

Launching products at a loss is a common practice in the technology industry. The goal is to build a base of loyal users and increase the price in the future.

Hardware for AI is very expensive. For example, Nvidia H100 accelerators cost around $30,000 a piece. Microsoft is known to use thousands of these accelerators.

It is difficult to calculate the real cost of Copilot's work. Earlier, OpenAI head Sam Altman estimated GPT-4 training at more than $100 million. However, unlike ChatGPT, Copilot is a more specialised model that requires fewer resources.

Source: Wall Street Journal