I keep wondering how many things like this need to happen before the other shoe drops and the ring-around-the-rosie investment structure collapses. It's become very obvious that "AI" in its current form isn't going to turn a profit, at least not in the short term.
The "They" here are the folks who are currently investing in 'selling' AI solutions to other companies. OpenAI, Microsoft, Google's Gemini, and a slew of AI-backed startups are good examples.
They don't need AI to turn a profit.
They need AI to be seen as widely adopted and "a part of life".
They need certain categories of folks (CEOs, CIOs, Boards of Directors) to see AI as valuable enough to invest in.
They need to keep up the veneer of success long enough to make their investments attractive to acquisition by Private Equity or to an IPO.
They need to juice the short-term stock price.
Their goal isn't to produce a long-term business, their goal is to raise short-term returns to the point that the investors get a nice return on their investment, and then it becomes someone else's problem.
Along with the Xbox app and eye tracking software that took forever to get rid of (with many-many steps--that still got reinstalled with subsequent updates) out of my "Professional" Windows installation, having co-pilot embedded in every screen finally convinced me to switch to Linux--forever.
Where is AI actually selling and doing well? What's a good resource for these numbers? What are the smaller scale use-cases where AI is selling well?
I am generally curious, because LLMs, VLMs, generative AI, advances are proving useful, but the societal impact scale and at this the desired rate is not revealing itself.
you can check on trustmrr.com (mostly indie/solo businesses) that a large chunk of those smaller companies make money by selling AI video generation and other genAI services.
I am running a container on an old 7700k with a 1080ti that gives me vscode completions with rag with similar latency and enough accuracy to be useful for boilerplate etc…
That is something I would possibly pay for but as the failures on complex tasks are so expensive, this seems to be a major use case and will just be a commodity.
Creating the scaffolding for a jwt token or other similar tasks will be a race to the bottom IMHO although valuable and tractable.
IMHO they are going to have to find ways to build a mote, and what these tools are really bad at is the problem domains that make your code valuable.
Basically anything that can be vibe coded can be trivially duplicated and the big companies will just kill off the small guys who are required to pay the bills.
Something like surveillance capitalism will need to be found to generate revenue needed for the scale of Microsoft etc…
Professional legal services seem to be picking up steam. Which sort of makes sense as a natural follow on to programming, given that 'the law' is basically codified natural language.
Well they've been making improvements to Notepad, like now it has tabs, and you can close it without saving a single one, sort of how I used Sublime Text for note tracking.
I meet with enterprise clients who explore things like Copilot Studio.
Microsoft platforms move too slowly too keep up with innovation pace, and suffer from classic platform restriction in regards to building useful, relevant, and *reliable* integrations into business systems.
My advise is to always start from scratch with AI, e.g. "build your own agent" and focus intimately on the rules/guardrails and custom tools you need for that agent to create value. A platform can't do that for you in current day.
MSFT needs to stay focused on O365 and coding tools with very simple UX wins. Not introduce custom agent platforms and auto-embed intrusive agents where no one asked for them.
Microsoft's Power Platform should be a big advantage. If you already have your data in Outlook/SharePoint, the PowerPlatform makes it easy to access. Unfortunately I've encountered several roadblocks deploying CoPilot Studio & Power Platform for my enterprise. Note: I'm using GCC, so everything is worse than normal.
1) Incomplete integration. Often I just want to write a prompt to create structured data from unstructured data. e.g. read an email and create a structured contact record. There's a block for this in Power Platform, but I can't access it. Studio can do this pretty well, but...
2) CoPilot Studio sucks at determinism. You really need to create higher level tools in Power Automate and call them from Studio. Because of (1) this makes it hard to compose complex systems.
3) Permissions. We haven't been able to figure out a secure way for people to share Copilot Studio agents. This means you need to log into studio and use the debug chat instead of turning the agent on in the main Copilot interface.
4) IDE. Copilot Studio bogs down real fast. The UI gets super laggy, creating a terrible DX. There should be a way to write agents in VScode, push the definitions to source control, and deploy to Copilot, but it isn't obvious.
5) Dumb By Default. The Power Platform has hooks into Outlook and Active Directory. Copilot has access to the latest OpenAI models. CoPIlot Studio has an MCP server for Calendar. Out of the box I should be able to tell CoPilot "schedule a 30min meeting with Joe and Larry next week." Nope. Maybe if I struggle through CoPilot Studio to create an agent? Still no. WTF Microsoft.
I guess I'll stop there. I really wanted to like Copilot studio, but it just didn't deliver. Maybe I'll circle back in a couple months, but for now I'm exploring other platforms.
PS don't even get me started on how we were so excited to retire our home-grown chat front end for the Azure OpenAI Service in favor of Copilot, only to have our users complain that Copilot was a downgrade.
PPS also don't talk to me about how CoPilot is now integrated into Windows and SIGNS YOU INTO THE FREE COMMERCIAL SERVICE BY DEFAULT. Do you know how hard it is to get people to use the official corporate AI tools instead of shadow AI? Do you know how important it is to keep our proprietary data out of AI training sets? Apparently not.
They got in trouble for tricking Office users into paying for AI-enabled plans they didn't actually want, and now they're all out of ideas.
I keep wondering how many things like this need to happen before the other shoe drops and the ring-around-the-rosie investment structure collapses. It's become very obvious that "AI" in its current form isn't going to turn a profit, at least not in the short term.
The "They" here are the folks who are currently investing in 'selling' AI solutions to other companies. OpenAI, Microsoft, Google's Gemini, and a slew of AI-backed startups are good examples.
They don't need AI to turn a profit.
They need AI to be seen as widely adopted and "a part of life".
They need certain categories of folks (CEOs, CIOs, Boards of Directors) to see AI as valuable enough to invest in.
They need to keep up the veneer of success long enough to make their investments attractive to acquisition by Private Equity or to an IPO.
They need to juice the short-term stock price.
Their goal isn't to produce a long-term business, their goal is to raise short-term returns to the point that the investors get a nice return on their investment, and then it becomes someone else's problem.
Well at least one, because this one didn't happen.
https://www.cnbc.com/video/2025/12/03/microsoft-have-not-low...
It won't happen. Too much $ had already been invested. It will work, one way or the other. It is here to stay.
Along with the Xbox app and eye tracking software that took forever to get rid of (with many-many steps--that still got reinstalled with subsequent updates) out of my "Professional" Windows installation, having co-pilot embedded in every screen finally convinced me to switch to Linux--forever.
Where is AI actually selling and doing well? What's a good resource for these numbers? What are the smaller scale use-cases where AI is selling well?
I am generally curious, because LLMs, VLMs, generative AI, advances are proving useful, but the societal impact scale and at this the desired rate is not revealing itself.
you can check on trustmrr.com (mostly indie/solo businesses) that a large chunk of those smaller companies make money by selling AI video generation and other genAI services.
Coding - e.g. Claude Code, Cursor both announced 1B revenue run rates.
I am running a container on an old 7700k with a 1080ti that gives me vscode completions with rag with similar latency and enough accuracy to be useful for boilerplate etc…
That is something I would possibly pay for but as the failures on complex tasks are so expensive, this seems to be a major use case and will just be a commodity.
Creating the scaffolding for a jwt token or other similar tasks will be a race to the bottom IMHO although valuable and tractable.
IMHO they are going to have to find ways to build a mote, and what these tools are really bad at is the problem domains that make your code valuable.
Basically anything that can be vibe coded can be trivially duplicated and the big companies will just kill off the small guys who are required to pay the bills.
Something like surveillance capitalism will need to be found to generate revenue needed for the scale of Microsoft etc…
Market size for this is in the billions though, not trillions.
it's easily a 200bn ARR business, if coding agent achieved another step jump in abilities ~ 1trn+ marketcap
Agreed, coding is one. What else?
Professional legal services seem to be picking up steam. Which sort of makes sense as a natural follow on to programming, given that 'the law' is basically codified natural language.
sales, marketing, customer support, oh my, so many
You´d think after Clippy and Windows 7, they´d take the clue and stop producing software that creates friction for users, instead of removing it?
You mean Vista. Windows 7 was perfect. Till it was ruined by what shall not be named.
What ruined windows 7?
No wonder if Microsoft failed to deliver a single AI tool that adds value.
Not to give "AI" too much credit here, but I wonder what was the last time MS built a value delivering product in the first place
Well they've been making improvements to Notepad, like now it has tabs, and you can close it without saving a single one, sort of how I used Sublime Text for note tracking.
Wow. I had no idea. Last time I used windows was probably 13 years ago...
It depends on your perspective on value. MS stock and lobbying, money bags, and government/corporate capture have provided unfathomable value.
I meet with enterprise clients who explore things like Copilot Studio.
Microsoft platforms move too slowly too keep up with innovation pace, and suffer from classic platform restriction in regards to building useful, relevant, and *reliable* integrations into business systems.
My advise is to always start from scratch with AI, e.g. "build your own agent" and focus intimately on the rules/guardrails and custom tools you need for that agent to create value. A platform can't do that for you in current day.
MSFT needs to stay focused on O365 and coding tools with very simple UX wins. Not introduce custom agent platforms and auto-embed intrusive agents where no one asked for them.
Microsoft's Power Platform should be a big advantage. If you already have your data in Outlook/SharePoint, the PowerPlatform makes it easy to access. Unfortunately I've encountered several roadblocks deploying CoPilot Studio & Power Platform for my enterprise. Note: I'm using GCC, so everything is worse than normal.
1) Incomplete integration. Often I just want to write a prompt to create structured data from unstructured data. e.g. read an email and create a structured contact record. There's a block for this in Power Platform, but I can't access it. Studio can do this pretty well, but...
2) CoPilot Studio sucks at determinism. You really need to create higher level tools in Power Automate and call them from Studio. Because of (1) this makes it hard to compose complex systems.
3) Permissions. We haven't been able to figure out a secure way for people to share Copilot Studio agents. This means you need to log into studio and use the debug chat instead of turning the agent on in the main Copilot interface.
4) IDE. Copilot Studio bogs down real fast. The UI gets super laggy, creating a terrible DX. There should be a way to write agents in VScode, push the definitions to source control, and deploy to Copilot, but it isn't obvious.
5) Dumb By Default. The Power Platform has hooks into Outlook and Active Directory. Copilot has access to the latest OpenAI models. CoPIlot Studio has an MCP server for Calendar. Out of the box I should be able to tell CoPilot "schedule a 30min meeting with Joe and Larry next week." Nope. Maybe if I struggle through CoPilot Studio to create an agent? Still no. WTF Microsoft.
I guess I'll stop there. I really wanted to like Copilot studio, but it just didn't deliver. Maybe I'll circle back in a couple months, but for now I'm exploring other platforms.
PS don't even get me started on how we were so excited to retire our home-grown chat front end for the Azure OpenAI Service in favor of Copilot, only to have our users complain that Copilot was a downgrade.
PPS also don't talk to me about how CoPilot is now integrated into Windows and SIGNS YOU INTO THE FREE COMMERCIAL SERVICE BY DEFAULT. Do you know how hard it is to get people to use the official corporate AI tools instead of shadow AI? Do you know how important it is to keep our proprietary data out of AI training sets? Apparently not.
[dead]