Venture Capitalist at Theory

About / Categories / Subscribe / Twitter

2 minute read / Feb 2, 2024 /

Standard Issue AI

“For some companies, [AI is] going to be standard issue like a PC.”

It’s not just for some. Many companies are moving in this direction. Across Microsoft products, OpenAI infrastructure, Github CoPilot (for coding), & Power Platform (for Office users) the growth is spectacular.

Calendar Quarter Azure OpenAI Orgs, k CoPilot Users, m Power Platform Orgs, k
1/1/24 53 1.3 230
10/1/23 18 1 126
7/1/23 11 63
4/1/23 2.5 36

OpenAI & Power Platform organizations have doubled or tripled in the last quarter.

There are more insights in Microsoft most recent earnings calls.

Microsoft’s document database, Cosmos, grew 42% annually, driven by AI. This shows the explosive growth of vector databases.

“Cosmos DB is the go-to database to build AI-powered apps at any scale… Cosmos DB data transactions increased 42% year-over-year.”

Small-language models are coming. The consensus within the data ecosystem is that many will start with more expensive large-language models which are robust to many types of questions, but perhaps too expensive to run for most applications at scale.

“We have also built the world’s most popular SLMs, which offer performance comparable to larger models but are small enough to run on a laptop or mobile device.”

SLMs promise to offer superior latency, better accuracy, at a lower cost, at the expense of specialization. This is the first time Microsoft has mentioned SLMs during its earnings calls.

“Our own research as well as external studies show as much as 70% improvement in productivity using generative AI for specific work tasks.”

Compare with ServiceNow’s data that shows engineering gains of 50%. If this data point is real, then AI could very well add several percentage points to GDP.

“In Azure, we expect Q3 revenue growth in constant currency to remain stable to our stronger-than-expected Q2 results.”

This wave isn’t slowing. Azure is projecting constant growth next quarter : another 30% to the $20b+ product line in annual growth.

This stellar growth presages strong demand across both agents & copilots in software, greater demand for databases for storing data, & compute power models.

Read More:

Experience as a Status Symbol