Dive Brief:
- GitHub Copilot for Business, an AI-fueled coding companion aimed at enterprise software teams, doubled its customer count quarter-over-quarter, said CEO Satya Nadella, speaking Tuesday during the company's FYQ4 2023 earnings call for the period ending June 30.
- Airbnb, Dell and Scandinavian Airlines are among the 27,000 companies using the enterprise service, which was first announced in November and made publicly available in February.
- "The easiest path to value over generative AI is to adopt solutions, for example, GitHub Copilot," said Nadella, according to a transcript of the call. "In some sense, it's sort of a no-brainer to add productivity leverage for all of the software developers in any organization."
Dive Insight:
GitHub was a precursor of sorts to Microsoft's AI strategy. The company, which Microsoft acquired in 2018, launched its AI-driven coding assistant in 2021 under technical preview.
GitHub's service quickly drew interest from developers. Now, the Copilot moniker is shaping Microsoft's push to infuse AI across its product inventory.
Despite Microsoft's enthusiasm, enterprise adoption of emerging technology lags behind its development. So, too, does return on investment.
Revenues haven't fully reflected the addition of new AI capabilities, said Scott Bickley, research practice lead at Info-Tech Research Group.
"AI’s impact on [Microsoft's] earnings this quarter was negligible; actually," Bickley said in an email. "AI would still be categorized as an expense as meaningful revenue generation has not started."
Microsoft has been working to optimize spending this year, including a layoff round that impacted 10,000 employees at the start of the year, and an additional wave of cuts earlier this month.
More details are needed to grasp the full effect of rising Copilot subscription numbers, Bickley said, such as how many end-users are in the 27,000 numbers and which tier companies are on. However, recent announcements show Microsoft hopes that AI solutions "will be a tailwind for revenue growth" in the coming fiscal year, Bickley said.
