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Creating credits out of thin air is impossible as all financial transactions must be accounted for. In the case of Azure credits, they will appear as increased
by dereg 4y ago
Creating credits out of thin air is impossible as all financial transactions must be accounted for. In the case of Azure credits, they will appear as increased revenue on Microsoft's balance sheet. However, if Microsoft decides to price Azure services below cost as part of their agreement with OpenAI, their profit margins will be affected. I highly doubt that is the case because the alleviation of cost is in the form of credits.
I would wager against comment 0 that said that this will materially affect earnings.
- rvz 4y agoIt will, hence the MSFT layoffs happening at the same time. People here wanted Google scale of operations and replacing Google with ChatGPT as their search engine. But it seems that some here have forgotten about the high availability requirements and incalculable operational costs of running a search engine. Google.com's availability is a very high barrier of serving in the multi-billions of searches a day. Azure has lots of experience in unreliability and running services at a massive loss whilst minting credits to compete on cost.
- Rastonbury 4y agoYou realise that openAI is just one customer of Azure, the second largest cloud provider in the world. How much revenue do you think they are forgoing? 50m is a rounding error there, their guidance for next quarters revenue has a range of a billion