Show Me The Gen AI Revenue
One has to wonder, at what point will investors hold Microsoft (MSFT), Google (GOOGL) and AWS/Amazon (AMZN) to account for showing Generative AI-related revenue?
Not all “AI” is the same, there are a number of permutations including machine learning, deep learning, natural language processing and robotic process automation to name a few. The AI hype over the past year is specifically focused on Generative AI, powered by ever larger and more complex Large Language Models (LLMs). It seems to me that the only companies generating meaningful revenue are NVIDIA (NVDA) for its AI chips and OpenAI (private) for selling access to its LLMs (primarily to MSFT).
Where is MSFT’s Gen AI-related revenue? Sure, customers leverage Azure’s Core AI/machine learning capability, but how many are heavily engaging Azure’s Gen AI capability (it’s really OpenAI’s IP) either through APIs or Microsoft applications? How many users are paying for and benefitting from Microsoft Copilot?
It’s not enough for MSFT to goose the price of Azure and then to hop on an EPS call and say that MSFT sees great interest for AI and that AI is powering Azure revenue growth. What is the Gen AI revenue number for the quarter? Share that figure with the world Satya Nadella. Publish Gen AI revenue in MSFT’s 8K filing. Oh, I forgot, MSFT won’t even publish Azure’s financials, nevermind Gen AI-specific revenue. To do so would be to end Microsoft’s smoke and mirrors game.