Bonum Certa Men Certa

Microsoft Lacks a Solid Strategic Plan Other Than Buying Its Own Stock (and Paying Staff in Shares)

posted by Roy Schestowitz on Feb 23, 2024,
updated Feb 23, 2024

Artificial Intelligence Micro Chip

There's no such thing as "AI chip"; it's pure hype or a new slant/spin/dig on processors with task-specific accelerators/execution channels/paths (not unprecedented at all)

THE rumours, gossip or words coming through the grapevine are not just that salaries at Microsoft aren't being increased (despite inflation). That much is publicly known. The same is true for the layoffs. Shares as "compensation" or salary is another hairy ball because any company can just "mint" some "shares" - it's a lot like fakecoins and it helps exaggerate worth where none exists (see WeWork, OpenAI, Reddit, VICE Media and many others where "value" was set at billions of dollars before insolvency or despite never making any money, only losing money).

Evil tongues say all those companies were doomed from the start. Burning lots of money is not a viable business model. Reddit is now gutted for its data and offloaded. It's an exit strategy, not a success story.

Welcome to modern economics, where many companies simply exist at the expense of the taxpayers (usually national debt, i.e. collateral deficit, 'crowdfunding' at a national scale with "stimulus"/"bailout") or, in most cases, some pyramid schemes in Wall Street - or equivalent - providing an inflow of cash, derived purely from speculation before or until the "chain reaction".

Yesterday we saw that Microsoft has "hardware company" ambitions despite a very awful track record. Puff pieces aplenty won't make it work this time around; it's all hype, just like the chatbots. An associate has called this "more Wintel duopoly", but this time around Intel is in trouble (it has its own problems) and it cannot salvage Microsoft. We see no reason why this will not fail like all the prior attempts at the same.

There's no way for Microsoft to financially gain here. There's no gain; beyond the PR that is...

At the moment all those puff pieces about Alman and/or Microsoft wanting to do "HEY HI" (AI) chips help keep chatbots in the headlines a little while longer, distracting from loads of negative publicity the chatbots have received so far this year. The sobering testaments now include ChatGPT malfunctioning entirely (earlier this week).

There's no promising future for chatbots because their quality is too low for people to pay for them and LLMs are extremely expensive to build and to use. When the chatbots bubble "pops", so will the "AI chips" frenzy. NVIDIA is exaggerating its sales this month; it isolates server side sales (still a minority) to make the growth seem very big.

Beware and be cautious of bubbles. Remember "metaverse", "Web3, "blockchains" and Apple's latest piece of expensive garbage (with very high return rates reported already).

"Microsoft, the world’s most valuable company, declared a profit of $4.5 billion in 1998; when the cost of options awarded that year, plus the change in the value of outstanding options, is deducted, the firm made a loss of $18 billion, according to Smithers."

--The Economist, 1999

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