Tech companies are touting new AI technology that can spit out business memos or computer code. They are still figuring out how those products will generate a profit. Generative artificial intelligence tools are unproven and expensive to operate, requiring muscular servers with expensive chips that consume lots of power. Microsoft, Google, Adobe and other tech companies investing in AI are experimenting with an array of tactics to make, market and charge for it. Microsoft has lost money on one of its first generative AI products, said a person with knowledge of the figures. It and Google are now launching AI-backed upgrades to their software with higher price tags. Zoom Video Communications has tried to mitigate costs by sometimes using a simpler AI it developed in-house. Adobe and others are putting caps on monthly usage and charging based on consumption. “A lot of the customers I’ve talked to are unhappy about the cost that they are seeing for running some of these models,” said Adam Selipsky, the chief executive of Amazon.com’s cloud division, Amazon Web Services, speaking of the industry broadly. It will take time for companies and consumers to understand how they want to use AI and what they are willing to pay for it, said Chris Young, Microsoft’s head of corporate strategy. “We’re clearly at a place where now we’ve got to translate the excitement and the interest level into true adoption,” he said. Building and training AI products can take years and hundreds of millions of dollars, more than with other types of software. AI often doesn’t have the economies of scale of standard software because it can require intense new calculations for each query. The more customers use the products, the more expensive it is to cover the infrastructure bills. These running costs expose companies charging flat fees for AI to potential losses.
Full story : AI’s Costly Buildup Could Make Early Products a Hard Sell.
