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Microsoft stock drops over 6% after results fall short in AI disappointment
- CameronBanga 2y agoWe'll see where we end up 5 years from now, but I think we may see Apple in a very nice position with AI by having tight integration with their platform, they'll never be first in AI so they won't have the expectation to lead the market, and their on-device first strategy may help keep costs from inflating wildly out of control if high-compute features fizzle out. As with all AI so far, still lacking to see the "why". Microsoft came out hard, but still don't see why other than generating potentially very wrong information or goofy looking pictures.
- bink 2y agoI don't necessarily disagree with you but this sounds a lot like what many people were saying about voice assistants not so long ago.
- jazzyjackson 2y agoThat they're expensive to run and don't produce useful results?
- matwood 2y agoThe bar is low with Siri, but it's much better in the AI betas. We'll see if this is a peak or the start of real improvement.
- MBCook 2y agoWell Apple is doing OK and Amazon lost their hat even though Apple was “way behind” in smart speakers. AI could turn out the same. You need good training data, but the biggest set out there (Internet) was quickly polluted to hell by AI and now it’s far less valuable for training. I’m skeptical of its long term value for the average user.
- dom96 2y agoWhat were people saying about voice assistants?
- bink 2y agoThat once Apple entered the market they would dominate it. Which, maybe they do, but they are far from good at it.
- rsynnott 2y agoAnd… they were kind of right? See the history of Amazon Alexa; it hasn’t actually gone very well for Amazon.
- jazzyjackson 2y agoI would settle for a local model to extract tables from PDFs. MS Co-Pilot is really disappointing in its utility and integration. Power Automate offers an Adobe connector that purports to do so but my data loss prevention policies forbid me to connect to third parties. GPT4o does a great job of taking a PDF and giving me exactly the contents in a csv of my specification, but again, can't do this with customer data. I'm looking at what is possible with llama3 as an azure service but it looks very complex to set up, I think I need to have a "data verse" and a network configuration to allow serverless compute to connect to my files. That will be nice tho when I can have the results of the PDF extraction insert rows into my excel files. I don't use Salesforce but I'm jealous of people who have a platform that they can actually integrate AI with their customer data.
- bcrl 2y agoEven Amazon's Textract API has issues with common invoices I've received. It Would Be Nice(tm) if this were a solved problem, but it isn't yet. Several other SaaS build on top of Textract and claim to do better, but the costs were unreasonable for the quantities of invoices I was processing compared to munging the raw data from Textract.
- thegabriele 2y agoWhat others SaaS? Thanks
- bcrl 2y agoSadly, I did not keep the notes on what I had found when I did the research. What turned me off of those services was that my out of pocket expense was going to be thousands of dollars to process around 1600 invoices. With AWS Textract the OCRed invoices cost under $20. I also tried the various open source OCR tools, but the error rate was way too high. Obivious faults like l or I in place of 1 in the middle of numbers. AWS Textract was pretty good with numbers, although it did stutter on the dates in a few invoices. For most of the invoices I was able to self-check the results as account balances and totals from month to month had to match. That made the end results from messy scripts extracting to CSV reasonably trustworthy.
- onlyrealcuzzo 2y agoThe vast majority of AI spend will be enterprise. That's not really Apple's forte. My crystal ball isn't working, but I wouldn't bet on Apple.
- legohead 2y agoAI has been a huge help in my daily life both work and home. I use it do debug, diagnose, search for information, write code, answer numerous questions I get from my kids, etc. "AI can be wrong" - like that hasn't been a problem with humans since forever... Like with any information, you have to be diligent. I teach my kids this also.
- da02 2y agoWhich AI tools do you use to debug? search for information?
- volkk 2y agosearch for information? -- perplexity is good for this debug -- cursor.sh for coding/debugging with your codebase as context. also just raw inputting into claude is pretty effective.
- pennybanks 2y agothink about the scope and relativity. with the amount these companies have totally committed to this idea and technology. in terms of consumer use for it to just search for info, and write code is a total failure. i mean by their words really. we are basically told it will be integrated in dang near everything and uses electricity
- passwordoops 2y agoIs it helpful to the point of a $30-$50 a month subscription? And at a larger scale, is this help in general worth the energy and water expenditure needed? Edit: to be clear the second point is not against the individual, but questioning whether the modest gains in convenience for all users are worth the environmental and infrastructure cost
- Thaxll 2y agoOld people used to call that "googling".
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- 01100011 2y agoThe "why" for AI right now is because everyone else is doing it and you can't risk not having a critical pillar needed to compete. I think AI is a loser for everyone but Nvidia for a while because of this. Google, Meta, Apple, Microsoft, etc will all be forced to spend billions to attempt AI but it will be years before it is good enough to generate significant profits. Even then, there may only be 1-2 winners, like Google was with traditional search.
- pennybanks 2y agoamd is looking real nice right now as well.
- scarmig 2y agoThere's also an interesting dynamic: costs scale exponentially (in a handwavey way) with quality. If you're willing to stay a half generation behind, you can create models a whole lot cheaper than the frontier labs. So Meta can always put significant price pressure on Google/OAI/Anthropic for relatively cheap. The only way I see AI making anyone trillions is if someone cracks the nut of true AGI and somehow manages to keep it under wraps.
- xracy 2y agoHere's a question... Does AGI actually change anything about how any of these companies make money? What makes someone trillions of dollars from AGI?
- _boffin_ 2y ago> What makes someone trillions of dollars from AGI? solving many million dollar problems.
- xracy 2y agoI don't think this question is as obvious as everyone else clearly thinks it is. But like here's the progression: 1. How does AI currently make money? (the answer is it doesn't, but like what's the world we think exists where a chat bot is monetizeable?) 2. What does AGI need to look like where it can actually solve many million dollar problems? 3. What million dollar problems does it solve? If the answers to this are as easy as they sound, then the responses to this should be easy to churn out, but instead everyone has shortcut that AGI == $$$, without showing the logic path. a response could look like: AGI solves P != NP -> $1M AGI solves customer service -> $100B AGI solves ??? -> $1B I'm making up ideas and numbers here, but this doesn't seem like that weird of an assumption to test given how everyone on here just takes it as gospel.
- akira2501 2y ago> help keep costs from inflating wildly out of control Aren't the majority of costs in feeding and training the model? If they hope to present a product that has access to pertinent and timely information I'm not sure how they're going to drastically reduce their costs on queries alone. > still lacking to see the "why" The "why" for AI should be blindingly obvious. The fact that this is an open question suggests that these simplistic large language models are still several orders of magnitude away from what that endpoint would be. This is a tiny stepping stone on a very long journey. It was foolish and insane to invest in it at the level Microsoft did.
- arebop 2y agoNow that AI means LLM specifically I guess you are right, but if you'd told me 20 years ago that we'd have cars driving themselves around major cities by now, I'd have been pretty impressed. I heard about the self-flying helicopter at CMU and robots playing soccer, but really finishing the science and engineering to have computers mundanely outperforming humans at safe city driving is remarkable. Except of course to current industry observers & wall street analysts, who are asking "will this ML mumbo jumbo ever amount to anything practical? Or is lane keeping with human vigilance and alarm-setting the pinnacle?"
- dom96 2y ago> but if you'd told me 20 years ago that we'd have cars driving themselves around major cities by now, I'd have been pretty impressed. Do we have this?
- Fauntleroy 2y agoWaymo cars drive through San Francisco constantly, and without major issues.
- wongarsu 2y ago> As with all AI so far, still lacking to see the "why" Microsoft poured god-knows-how-many billions into Bing with barely anything to show for it. They hover just below 4% market share. AI is their one chance to actually upset the Google monopoly. But only if they manage to pull it off before Google, hence all their mediocre rushed-to-market AI stuff. Of course the real money with current AI is elsewhere. But replacing first-line customer support with AI isn't the kind of story you will see promoted by PR departments.
- thefz 2y agoSo as usual, Microsoft is innovating while Apple just sells what everybody else has already tested (maybe even claiming the fatherhood of he idea). Nothing new.
- rcarmo 2y agoSo, exactly the reverse of 20 years ago?
- pton_xd 2y agoI'd settle for a functional Alexa at this point. Or maybe a mobile keyboard that doesn't constantly make me typo. Surely applied AI can at least improve these areas of my life within the next few years.
- beanjuiceII 2y agoi must say this weekly about a mobile keyboard that doesnt constantly typo...
- collingreen 2y agoYes please
- ghaff 2y agoThere is basically no conversational AI. There is something that can understand your voice--given a fairly conventional American accent. But nothing that can do anything along the lines of a pretty dim-witted executive assistant.
- mcphage 2y ago> Or maybe a mobile keyboard that doesn't constantly make me typo. I.don't.understand.what.you're.talking.about.here?
- xnx 2y agoNVDA also down 7% today, so not specific to MSFT.
- FreakLegion 2y agoMSFT is down in after-hours trading because of their earnings. NVDA was down during regular trading, and is actually mostly back up in after-hours trading.
- GiorgioG 2y agoMaybe...finally the AI bubble is about to burst. Sell that NVIDIA stock folks if you were lucky enough to get them cheap.
- whynotmaybe 2y agoCould we say that we've reached the "Peak of inflated expectations" on the Gartner hype curve for AI and we're softly entering the "Trough of disillusionment"? https://en.m.wikipedia.org/wiki/Gartner_hype_cycle https://en.m.wikipedia.org/wiki/Gartner_hype_cycle
- akira2501 2y agoHype is not actually a thing. Hype comes into existence in environments where skepticism and honest engineering have been intentionally removed and obscured. To the extent that there's a "hype cycle" there's probably actually just a "journalism crisis."
- JohnFen 2y ago"Hype" is a marketing tactic.
- babypuncher 2y agoTo put all the blame on journalists seems disingenuous. Tech companies spend a lot of money marketing their newfangled toys to drum up the hype.
- akira2501 2y ago> blame on journalists I wouldn't blame them. I would blame the people who _own_ those outlets. As they're the ones with an actual interest in obscuring the truth. > spend a lot of money marketing their newfangled toys There are lots of short term ideas in the market place. None of them are particularly novel. So, it should be surprising, particularly in the era of the internet, that they still work.
- panarky 2y agoThe rate of improvement of AI capability is remarkably predictable, while public perception and investor sentiment wildly overshoots and undershoots depending on the animal spirits of the population. Back when GPT-2 was released, you could draw an exponential curve to fit the rate of capability increase in AI over the prior five years. If you extend that curve to today, frontier models are still on that same curve. That underlying rate of improvement isn't useful for predicting if Nvidia will be up or down next week, but it's a pretty strong signal for how things might play out longer term. At some point the exponential growth portion of the S-curve will exhaust itself, but there's no hint of that yet.
- peppertree 2y agoI pay for ChatGPT pro subscription and I use it far more than Google these days. I believe OpenAI can unseat Google but it's going to take far longer than one quarter.
- xyst 2y ago“Just one more quarter bro”
- zx8080 2y ago"Single-quarterly life of all corporations".
- dom96 2y agoI paid for it for around 3 months. The free version is enough for the rare times I actually use it, and many times I tried to use it it was down, so I switched to Gemini. Google is the same if not better here. OpenAI has no moat.
- xyst 2y agoAi is overhyped. No surprise. Also microshit suite was down for most of the day. So it was a business day off. Lol
- bparsons 2y agoI think the short term business case for LLMs is failing to materialize. It is close, but not quite ready for prime time. I think of the promise of internet commerce in 1996. Everyone understood the potential, but we were still a few years away from the rubber meeting the road.
- kvathupo 2y agoAs a young dev, interested in your point about 1996. Mind elaborating?
- Zelphyr 2y agoCan't speak for OP but, in '96 Netscape had just had a wildly successful IPO and talk of the Internet and World Wide Web was everywhere. It was kind-of obvious to anyone who paid attention where it was going, especially e-commerce, but, the technology wasn't quite there yet and a critical mass of users hadn't yet been reached. Over the next 4-5 years, investors threw massive amounts of money at any company with ".com" in their name, regardless of whether they had a single customer. Companies who were offering little more than a single feature were raising VC funding. It was a fun time to be in tech but the bubble bursting around 2000 was painful.
- pyrelight 2y agoDuring that time, the web was mostly brochure websites. No revenue was generated from these sites as they were purely informational. "Web 2.0" was born during this time (maybe a little later) and introduced a paradigm shift where the Internet was becoming more commercial. It took some time for things like merchant accounts to run credit cards to become available for Internet usage, which was huge since fraud was a major consideration with Internet shopping. There was also none, or very few, SaaS eCommerce platforms like Shopify, so eCommerce was mostly a roll-your-own or use a new open source eCommerce platform that was in its infancy. It wasn't until the mid 2000s that popular self hosted platforms like OpenCart, Magento, PrestaShop, WooCommerc, etc, were available and mostly feature complete for most customers needs back then.
- latchkey 2y ago
- Zelphyr 2y agoHard to believe ham-handedly shoving AI into everything they see, whether it needs it or not, whether it works or not, isn't working out for them.
- deleted 2y ago[deleted]
- waylandsmithers 2y agoMeanwhile, the overall results don't make it seem like the sky is falling > For the quarter, Microsoft reported earnings per share (EPS) of $2.95 on revenue of $64.7 billion. Wall Street was anticipating EPS of $2.94 on revenue of $64.5 billion, according to data compiled by Bloomberg.
- 0xTJ 2y agoGreat, their direction with Windows has been irritating enough that I've left and don't plan to come back to it. I can't understand the perspective of whatever executive decided to shoehorn AI features into Windows in the way they did.
- com2kid 2y agoTo be clear > $28.5 billion versus expectations of $28.7 billion. At the scale of MS, that is a dozen or so missed large contracts out of thousands they likely signed. It is hardly the end of the world. I am more curious about how they are going to get away with constantly giving copilot branded AI features away as part of the core OS.
- rcarmo 2y agoExpectations is the key word here. Investors are antsy with the geopolitical situation and want quick returns out of everything.
- keernan 2y agoI believe the most immediate AI impact will be identifying patterns in data that result in breakthroughs in medicine and other science fields.