Microsoft: Marketing Is One Thing, a Cost Black Hole Is Quite Another
March 11, 2025
Yep, another dinobaby original.
I read “Microsoft Cuts Data Centre Plans and Hikes Prices in Push to Make Users Carry AI Cost.” The headline meant one thing to me: The black hole of AI costs must be capped. For my part, I try to avoid MSFT AI. After testing the Redmoanians’ smart software for months, I decided, “Nope.”
The write up says:
Last week, Microsoft unceremoniously pulled back on some planned data centre leases. The move came after the company increased subscription prices for its flagship 365 software by up to 45%, and quietly released an ad-supported version of some products. The tech giant’s CEO, Satya Nadella, also recently suggested AI has so far not produced much value.
No kidding. I won’t go into the annoyances. AI in Notepad? Yeah, great thinking like that which delivered Bob to users who loved Clippy.
The essay notes:
Having sunk billions into generative AI, Microsoft is trying to find the business model that will make the technology profitable.
Maybe someday, but that day is not today or tomorrow. If anything, Microsoft is struggling with old-timey software as well. The Register, a UK online publication, reports:
Back to AI. The AI financial black hole exists, and it may not be easy to resolve. What’s the fix? Here’s the Microsoft data center plan as of March 2025:
As AI infrastructure costs rise and model development evolves, shifting the costs to consumers becomes an appealing strategy for AI companies. While big enterprises such as government departments and universities may manage these costs, many small businesses and individual consumers may struggle.
Several observations are warranted:
- What happens if Microsoft cannot get consumers to pay the AI bills?
- What happens if people like this old dinobaby don’t want smart software and just shift to work flows without Microsoft products?
- What happens if the marvel of the Tensor and OpenAI’s and others’ implementations continue to hallucinate creating more headaches than the methods improve?
Net net: Marketing may have gotten ahead of reality, but the black hole of costs are very real and not hallucinations. Can Microsoft escape a black hole like this one?
Stephen E Arnold, March 11, 2025
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