4 ms·

What is the financial upside Microsoft is seeing to this that no one else seems to see?

by tboyd47 3y ago

esafak 3y ago
They can shoulder risks that other companies can't so they stand to capture more market share?
- tboyd47 3y ago
  There is no market yet for a product that is unprecedented in nature.
- dndn1 3y ago
  +1 Maybe they hope to kill new entrants for the enterprise market, including open source.
  - dndn1 3y ago
    ^ to elaborate on possible logic: Training an LLM is a low barrier; legal guarantees is a high barrier. This might turn out to be quite important; without backfiring it seems like a very smart move.
thesuperbigfrog 3y ago
>> What is the financial upside Microsoft is seeing to this that no one else seems to see? Many businesses have not adopted Copilot because of potential legal issues. If any of the generated code / content is copyrighted, it could result in negative impacts to the business. For example, if Copilot generated code that is identical to code that it was trained on that was licensed under the GPL and a company included the generated code in a proprietary commercial product, then the company's product could be subject to the terms of the GPL and the company sued in court. Assuming liability for the generated code means that Microsoft is making Copilot more attractive for businesses to adopt. More Copilot adoption means more profits for Microsoft.
- tboyd47 3y ago
  You guys aren't really getting my question. Duh, of course Microsoft makes revenue when they have more Copilot customers. But taking on such a huge external liability for a $30 subscription product just doesn't make sense. Even if it gets 1 million subscribers, it would represent 0.1% of Microsoft's overall revenue. Software lawsuits can become multi-billion dollar expenses, and targeting Microsoft instead of random Copilot customer Bespoke Clojure Gurus, LLC will mean much larger awards in such suits. Why Microsoft would just volunteer for such a risk baffles me. My confusion is more over the balance of revenue and expenses than just "derp, me no understand why do companies do things to make money, derp"
  - hirsin 3y ago
    A million subscribers would barely make it noticeable in Microsoft's books. You don't count until you hit a billion in revenue there. But an AI on every desk ? That's worth it.
  - thesuperbigfrog 3y ago
    >> Even if it gets 1 million subscribers, it would represent 0.1% of Microsoft's overall revenue. Microsoft is going all in. They want to have hundreds of millions of subscribers. They want everyone who is using Visual Studio Code for a business to use Copilot. With enough uptake, it could be a billion dollar business. >> Software lawsuits can become multi-billion dollar expenses Microsoft has teams of top lawyers and they are rolling the dice that there will not be enough lawsuits to justify the risk. >> My confusion is more over the balance of revenue and expenses than just "derp, me no understand why do companies do things to make money, derp" If you want more precise answers, ask more precise questions.
    - deleted 3y ago
      [deleted]
  - tick_tock_tick 3y ago
    > But taking on such a huge external liability for a $30 subscription product just doesn't make sense. Your confusion come from your mis-assessment of the actual risks. Microsoft engaged with tons of lawyers and legal experts and determined there is basically no risk at all taking this stance. You think there is a very real risk that the AI output is copyright infringement while Microsoft's deep analysis says the opposite; that's the mismatch.
skywhopper 3y ago
They're having trouble getting enterprise customers to sign up for Copilot because of uncertainty over copyright implications of generated code. So they are attempting to remove the uncertainty by claiming they will hold themselves responsible. They are betting that this will allow them to win more Copilot customers. Ultimately, Microsoft has every incentive to ensure that Copilot-generated code is legally allowed; in other words, they will want to make sure any cases that come up related to Copilot code are ruled in their favor. As such they may as well be the ones paying the legal bills. That encourages more customers to sign up and aligns incentives across the board.
deleted 3y ago
[deleted]
rcxdude 3y ago
Apart from the attempt to win over more cautious customers, most AI companies want this to go to court, because an established precedent in their favor will be very valuable to them (and they generally expect it will be in their favour, at least to the extent that the risk it might not is outweighed by the cost of uncertainty). You can see this in the cases related to stable diffusion where Stability AI is basically beckoning them into court despite (and probably in part because) the plaintiffs having so weak a case the judge is likely to just chuck it out before any precedent can be established.

What is the financial upside Microsoft is seeing to this that no one else seems to see?

esafak 3y ago

They can shoulder risks that other companies can't so they stand to capture more market share?

tboyd47 3y ago
There is no market yet for a product that is unprecedented in nature.
dndn1 3y ago
+1 Maybe they hope to kill new entrants for the enterprise market, including open source.
- dndn1 3y ago
  ^ to elaborate on possible logic: Training an LLM is a low barrier; legal guarantees is a high barrier. This might turn out to be quite important; without backfiring it seems like a very smart move.

thesuperbigfrog 3y ago

>> What is the financial upside Microsoft is seeing to this that no one else seems to see? Many businesses have not adopted Copilot because of potential legal issues. If any of the generated code / content is copyrighted, it could result in negative impacts to the business. For example, if Copilot generated code that is identical to code that it was trained on that was licensed under the GPL and a company included the generated code in a proprietary commercial product, then the company's product could be subject to the terms of the GPL and the company sued in court. Assuming liability for the generated code means that Microsoft is making Copilot more attractive for businesses to adopt. More Copilot adoption means more profits for Microsoft.

tboyd47 3y ago
You guys aren't really getting my question. Duh, of course Microsoft makes revenue when they have more Copilot customers. But taking on such a huge external liability for a $30 subscription product just doesn't make sense. Even if it gets 1 million subscribers, it would represent 0.1% of Microsoft's overall revenue. Software lawsuits can become multi-billion dollar expenses, and targeting Microsoft instead of random Copilot customer Bespoke Clojure Gurus, LLC will mean much larger awards in such suits. Why Microsoft would just volunteer for such a risk baffles me. My confusion is more over the balance of revenue and expenses than just "derp, me no understand why do companies do things to make money, derp"
- hirsin 3y ago
  A million subscribers would barely make it noticeable in Microsoft's books. You don't count until you hit a billion in revenue there. But an AI on every desk ? That's worth it.
- thesuperbigfrog 3y ago
  >> Even if it gets 1 million subscribers, it would represent 0.1% of Microsoft's overall revenue. Microsoft is going all in. They want to have hundreds of millions of subscribers. They want everyone who is using Visual Studio Code for a business to use Copilot. With enough uptake, it could be a billion dollar business. >> Software lawsuits can become multi-billion dollar expenses Microsoft has teams of top lawyers and they are rolling the dice that there will not be enough lawsuits to justify the risk. >> My confusion is more over the balance of revenue and expenses than just "derp, me no understand why do companies do things to make money, derp" If you want more precise answers, ask more precise questions.
  - deleted 3y ago
    [deleted]
- tick_tock_tick 3y ago
  > But taking on such a huge external liability for a $30 subscription product just doesn't make sense. Your confusion come from your mis-assessment of the actual risks. Microsoft engaged with tons of lawyers and legal experts and determined there is basically no risk at all taking this stance. You think there is a very real risk that the AI output is copyright infringement while Microsoft's deep analysis says the opposite; that's the mismatch.

skywhopper 3y ago

They're having trouble getting enterprise customers to sign up for Copilot because of uncertainty over copyright implications of generated code. So they are attempting to remove the uncertainty by claiming they will hold themselves responsible. They are betting that this will allow them to win more Copilot customers. Ultimately, Microsoft has every incentive to ensure that Copilot-generated code is legally allowed; in other words, they will want to make sure any cases that come up related to Copilot code are ruled in their favor. As such they may as well be the ones paying the legal bills. That encourages more customers to sign up and aligns incentives across the board.

deleted 3y ago

[deleted]

rcxdude 3y ago

Apart from the attempt to win over more cautious customers, most AI companies want this to go to court, because an established precedent in their favor will be very valuable to them (and they generally expect it will be in their favour, at least to the extent that the risk it might not is outweighed by the cost of uncertainty). You can see this in the cases related to stable diffusion where Stability AI is basically beckoning them into court despite (and probably in part because) the plaintiffs having so weak a case the judge is likely to just chuck it out before any precedent can be established.