Microsoft's GitHub shifts to metered AI billing amid cost crisis

Microsoft is closing the AI buffet offered to GitHub Copilot customers, acknowledging that it can’t sell AI like Red Lobster's Endless Shrimp. The US seafood restaurant's all-you-can-eat shrimp promotion led the company to bankruptcy in 2024 and while Microsoft is nowhere near so financially overextended, the software giant's …

[An_Old_Dog]

The Old Shell Game

usage-based billing is non-deterministic

The cover of non-deterministic token consumption is a wonderful umbrella for all sorts of potential billing shenanigans ("revenue enhancement").

Back in the day, we were charged for mainframe computing. CPU seconds, lines printed, cards read, cards punched, terminal connect time, permanent storage used.

But the rates for each of those were published, so unless you did something foolish such as setting a very high CPU time or line output limit on a job which had an infinite loop bug, you weren't surprised when you got your bill.

[NATTtrash]

Re: The Old Shell Game

Back in the day, we were charged for mainframe computing.

Indeed, the great new technical advances of our time look pretty... familiar.

[https://i.dawn.com/large/2022/12/639e1905351d8.jpg]|------> [https://www.pinterest.com/pin/377880224961270497/]

[The Man Who Fell To Earth]

Re: The Old Shell Game

Ed Zitron has been predicting this bait & switch for a while.

https://www.wheresyoured.at/ais-economics-dont-make-sense/

[jake]

The free ride is nearly over for so-called AI.

Have all you free-loaders learned enough to discover that the over-hyped nonsense is not worth paying for?

[frankyunderwood123]

Re: The free ride is nearly over for so-called AI.

It is though.

Yep, AI with everything is becoming tiresome and the speed of adoption is deeply concerning, but if it wasn’t genuinely useful, companies wouldn’t be paying for it.

[jake]

Re: The free ride is nearly over for so-called AI.

"but if it wasn’t genuinely useful, companies wouldn’t be paying for it."

Have you read the articles on that subject here on ElReg? It would seem that yes they happily pay for it (for now), but no, it is not very useful from a business perspective.

[werdsmith]

Re: The free ride is nearly over for so-called AI.

"Have you read the articles on that subject here on ElReg?"

Yes, they are playing to the crowd a bit aren't they? As usual.

It doesn't reflect reality much. You don't like it and you want to believe it's failing but apart from the actual financial model affect the big frontier providers, companies are leaning heavily into it. In my direct experience.

[SundogUK]

Re: The free ride is nearly over for so-called AI.

They're scared shitless they're going to get left behind. It doesn't mean it's going anywhere.

[Richard 12]

Re: The free ride is nearly over for so-called AI.

Companies often pay for things that aren't useful as an experiment to find out whether it might be.

On top of that, if something is useful at $10 or $39 per month, it does not follow that anyone will pay $500 or $1000 per month for it - and that's the kind of price rise that must come.

[Throg]

Re: The free ride is nearly over for so-called AI.

if it wasn’t genuinely useful, companies wouldn’t be paying for it.

Seriously? Have you ever worked for BigCorp?

[Blackjack]

Re: The free ride is nearly over for so-called AI.

Companies and governments wasting money in useless stuff is nothing new and Microsoft itself admits Copilot is useless for actual work.

https://www.theregister.com/2026/04/02/copilot_terms_of_service

[nijam]

Re: The free ride is nearly over for so-called AI.

> ... companies wouldn’t be paying for it.

Have you heard the espression "FOMO"?

[CrazyOldCatMan]

Re: The free ride is nearly over for so-called AI.

Have you heard the espression "FOMO"?

Or the corporate equivalent:

"But $BIG_Competitor is doing it so we have to"

[frankyunderwood123]

Re: The free ride is nearly over for so-called AI.

wow, epic downvoting.

another comment of mine where I’m dissing aspects of AI got mega upvotes.

think there’s a pattern?

yep, many people knee jerk react. They have decided everything about AI sucks so they'll downvote even a sniff of positivity.

I could post a simple statement “AI sucks” and it would get upvotes.

That is such a blinkered approach, but hey ho - amusing amount of downvoting

[Dan 55]

Re: The free ride is nearly over for so-called AI.

Everyone is a freeloader, even those paying $200 a month. All LLM use is subsidised and it's unsustainable, thankfully.

[Paul Herber]

Re: The free ride is nearly over for so-called AI.

You are all freeloaders!

I'm not.

[cyberdemon]

Re: The free ride is nearly over for so-called AI.

Who are you calling a freeloader? I have paid for every bit of AI I have used: A big fat zero*.

* (OK, I have used it, if the shoved-in-your-face search summaries count as usage. But, you pay with your data)

[MonkeyJuice]

Re: The free ride is nearly over for so-called AI.

You didn't order that. It's not your fault that Google and friends serve everything with a side of wasted cycles these days. It's just an operational loss they decided to bake into their business.

[frankyunderwood123]

Mr. pusher man

The first few hits are free…

It strikes me as being somewhat suspicious behaviour to all of a sudden claim that the business model was wrong and adjust pricing upward.

Very convenient now that so many companies have adopted copilot work patterns at scale and that bailing out now would be painful.

Well, painful for those who suddenly felt the rush of having a superpower to generate convincing verbosity at the click of a button.

Not so painful for those having to try and wade through it all.

If the price keeps going up, it’s going to be interesting to see how companies adapt.

There could be a lot of egg in faces of those who have leaned on AI who have no actual depth of knowledge when suddenly faced with all their tokens running out with still 3 weeks of a month left. Businesses are surely going to apply stricter caps to keep costs down.

I do hope so as I’m getting tired of having to wade through pages of documentation where a single paragraph would have sufficed.

A bit like my post, except I wrote all this opinionated shit myself.

[ChoHag]

Re: Mr. pusher man

GPT: Summarise this for me.

[Guido Esperanto]

Re: Mr. pusher man

GpT: Thanks Dave

In summary AI = good

Opinions = bad

Keep spending on AI, you'll love it.

By the way, I like how thoughful you're being

End of line.

[AtomicDog]

Re: Mr. pusher man

Well the good news is that the expensive models charge lots per token output - meaning unnecessary verbosity is expensive. So hopefully that will soon be a thing of the past.

[katrinab]

Re: Mr. pusher man

The business model was wrong, and people have been saying that for a while.

The thing is that most software has very high fixed costs for development, then very low variable costs as you add customers.

This is very different, You have the very high fixed costs, but you also have very high variable costs in the form of data centre electricity bills and the costs of new data centre hardware as you scale up.

[Bebu sa Ware]

The Shrimp is bit off

At least with Red Lobster's "Endless Shrimp," the scampi was fresh but as with most Microsoft's offers this typically comes the raw prawn with the customer.

[Lee D]

And so it begins

The AI people are now starting to hit reality that they have invented an INCREDIBLY INEFFICIENT way to automate some basic tasks.

And it's about to come home to roost that they've thrown it into all their workflows, included it in all their products, etc.

I've been estimating the last couple of years that the actual real price of an AI token should probably be 5-10 times what it currently is, just for them to break even on training, datacentre costs, etc., let alone operating profit, and paying back TRILLIONS in loans and investments.

Plus, rising electricity prices, including peak-hour consumption and - even worse - requiring so much that renewables can't deliver it and we're falling back to oil...

And then, all of a sudden, it's not so cost effective to have some generic AI running your website chatbot, or have the AI analyse every email, or have the AI running constantly 24/7 to review your code, etc.

[Anonymous Coward]

Re: And so it begins

So you're suggesting that we find AI Chatbots on public websites, and start asking questions that aren't quite answered anywhere?

[DecyrptedGeek]

Re: And so it begins

Now I want to install a local LLM so that when I have to interact with some stupid AI driven customer support I'll let it burn thu their tokens.

[Lee D]

Re: And so it begins

People are already misusing those chatbots to answer their programming queries and write essays for them.

They often have no safeguards at all and you can just use them as a generic AI and burn through the company's tokens.

[Roland6]

Re: And so it begins

Bets on the first company to file for insolvancy due to being unable to pay the AI bills..

[Michael Strorm]

Re: And so it begins

Well, yeah.

While it may have been the AI companies' intention to attract business customers by massively subsidising the cost and *then* ramping them up once those businesses are locked in, that only works if the company can afford to pay that bill without going under.

They might not care about that otherwise, but they *do* need them to survive if they want paid.

If your business plan was built on the assumption that you'd continue getting AI services at the old- and unsustainably low- price, there's no guarantee it's going to be viable when you're being charged several times that amount. Particularly since you'll probably have to increase *your* prices similarly to make a profit since, depending upon what *you're* offering, *your* customers aren't necessarily going to pay that much more.

Of course, if your business plan was reliant upon those subsidised prices, it was flawed in the first place. But then, the flaws in the AI companies' *own* business plans may be that there aren't- and never were- enough businesses able, let alone willing, to pay the "real" price they'd have ultimately had to pay.

(Obligatory link to Ed Zitron article describing this as the "subprime AI crisis" by analogy with the 2008 subprime crisis which was caused by unsustainably low interest rates convincing people they could afford the payments on things they really couldn't when rates went up.)

[Cris E]

Re: And so it begins

Maybe we can save on output tokens by having Github just send out links to other companies' code that suits our needs.

C'mon, be honest, how much of what we all do is really that unique? Billing? Inventory? HR? Social media and content mgmt? Lots of health care and insurance and law and whatever other industry you want to name has been done fairly well and Github has a pile of it. They may as well just send out what's sitting there and make some money, save us all some time.

[Anonymous Coward]

Re: And so it begins

We're in for an interesting ride if the AI bubble bursts at the same time as an oil shock hits the rest of the economy. At that point we may get to find out whether the accelerationists were right* as everything cascades into freefall...

* I'm no gambler but I'd bet money on "no."

[Lee D]

Re: And so it begins

As a highly-educated friend of mine said about Brexit and all sorts...

You can have utter catastrophe, and we regularly do, but actually tanking the whole world wouldn't happen or would be very brief if it did ever happen.

Brexit was never going to kill the UK, just wound it unnecessarily.

Same for this - AI dying etc. might bring about a depression-era, but things will recover and carry on because otherwise the human race is basically extinct.

[Groo The Wanderer - A Canuck]

As with any drug dealer, the first taste is free - and you've all had your taste, addicts.

[druck]

Never mind the quality, feel the cost

Slop, get your slop here, only $100 $200 $400 a bucket!

[T. F. M. Reader]

I am not a freeloader!

If I've never given GitHub/MSFT my credit card details, can I hope now that they won't shove the bloody Copilot down my throat, ever?

[Dan 55]

Re: I am not a freeloader!

If you wonder onto the Copilot screen or follow a link from another site to there, Copilot Free will be activated for you automatically, stuff will be enabled, and the upsell will begin.

[EdSaxby]

Re: I am not a freeloader!

It's ok, your bank will be using AI, so the AI agent will be able to locate your credit card details and process the charges for you. Helpful right?

[Anonymous Coward]

Super subsidised

Even with the change in billing here, I still doubt that it covers the cost.

It'll still be subsidised, and the cost will trickle, sorry - explode upwards.

My employer is pushing massively forward to try to get a lep on competitors, but I'm expecting a hard brake - even a handbrake turn eventually.

[Omnipresent]

who's going to tell them?

RL endless shrimp is back and being advertised rn.

[Anonymous Coward]

Re: who's going to tell them?

The endless shrimp promotion wasn't even the primary cause of Red Lobster's failure, either. In 2014, the owner of RL instituted a sale-leaseback scheme, which hit the chain with massive lease costs (similar scheme impacted Sears). Years later, the problem was that one of their owners was also a primary supplier who inflated product costs to increase short-term profits. Then there was the usual Covid-era issues and later inflationary/affordability issues that have hit causal sit-down restaurants, especially aging ones.

[Parko]

First comes the free service.

Then come the premium offerings.

Followed by enshittification.

Then the price rises.

And finally, upon attaining sufficient market share and lobbying prowess, come the endless government contracts that have you paying for service you no longer want.

[ForthIsNotDead]

Companies are very soon going to find out...

... that it will be much cheaper to fire the code-bro's and re-hire the experienced devs.

My co-pilot subscription will become 9x more expensive. At that price... No thanks. It definitely helps me to write code faster, but I'll take slower over 9x more expensive, thanks very much. Won't be renewing.

[Arboreal Astronaut]

who knew The Register was such an easy mark for private-equity PR?

No, Red Lobster didn't go bankrupt because of "endless shrimp", Red Lobster went bankrupt because of private equity running its typical predatory schenanigans: acquire a potentially healthy/solvent established company (typically in a leveraged buyout), sell off as many liquid assets as possible and load the company down as much as possible with debt (in the case of large restaurant and/or retail chains like Red Lobster that have significant real estate assets in their brick-and-mortar storefronts, this typically involves transferring real estate ownership to vampiric shell companies which can then leech the target company dry with rent payments), then use some combination of more shell companies and bankruptcy-law loopholes to make sure other people are left holding the bag when the company inevitably goes under.

Basically, an ever-increasing slice of the U.S. financial sector is organized around a thinly veiled version of the naked con game that Tony pulled off against the sporting goods store owner in season 2 of The Sopranos, especially when the target is vaguely well-known enough that a headline-worthy alibi can be provided for the benefit of gullible media dupes like The Register.

[Cris E]

Re: who knew The Register was such an easy mark for private-equity PR?

You are correct, but to be fair there was another very clearly awful angle where a related company that sold shrimp was pumping money out of RL through extravagant, unsustainable seafood sales. The vile PE lizards were working on multiple levels.

[Blackjack]

So not only will you get AI nag on Windows but it will be nag asking you to subscribe to give them money? Wonderful news! If they paywall all AI crap then you can just not use it by not being subscribed.

[Brave Coward]

So...

... endless shrink now?

[Anonymous Coward]

Whadya know. Finally gravity reasserts itself and the tide starts going out.

[Groo The Wanderer - A Canuck]

My latest response to token fees and my continuing quest for data privacy through edge computing sees cline with a gemma4:e4b backend replaced by a Local-AI-Assistant extension with the same backend and context size of 65536. But this time it can handle dozens more files to analyze for a query, streaming through the engine and collecting information as it goes, apparently without blowing the 65536 limit because I saw no errors reported.

The suggestions were similar to what cline had come back with, but more targetted and specific because it had successfully analyzed the server.markhome.mcf.v3_1.cfsec.cfsec back-end interface files and the server.markhome.mcf.v3_1.cfsec.cfsecobj object layer that rides over top my various back end implementations, providing a back-end agnostic interface and implementation for writing the business logic of an application.

I'm going to try adding a couple more key cfsec repositories to the workspace - specifically cfsecbuff and cfsecjpa, which are the primary implementations of the interfaces in cfsec.cfsec, and then later I'll add the cfsecram specialization of the cfsecbuff partial implementation so that I'm getting an analysis of the four key layers I've migrated so far.

[Groo The Wanderer - A Canuck]

Adding the cfsecjpa package to the set of files being evaluated proved very interesting, as their addition confirmed for the LLM what it had suspected based on the code patterns: it's a fully-fleshed ORM interface, and it updated it's suggestions and change notes accordingly.

Now I'm starting to get curious as to what kind of information I'd get back if I had an A100 or better, an NVidia card that can run 100GB models, not 9GB models. Or as a first step, to try running this 9GB Gemma4 model with a huge token window so it can hoover a truly insane number of application code files with aplomb!

[scobiej]

It is very useful for those with experience

As a seasoned developer of, cough, many years, the use of AI when coding on large systems is, IMHO, absolutely amazing. But you have to know what you are doing, asking, and looking at. If you don't, well, you aren't going to reap the benefits. The old adage of Garbage In, Garbage Out, hasn't gone away.

[Reginald O.]

It's not me, it's you!

We all knew the marriage of MS to Github wouldn't work out. Another sign.

[Jim Eadon]

Microsoft Pretend Intelligence Tokens Tax. Cough-up, Peasants.

This is a sinister twist on the good old honest days of Embrace, Extend, Extinguish.

Want a source control tool. You gotta pay the PI (Pretend Intelligence) tokens tax. Because costs or something. WTF?

Honestly, why are people still using Github? Stockholm syndrome?

[suriyun]

Red Lobster sold out to private equity who proceeded to asset strip the land which results in rents skyrocketing to unaffordable levels for the restaurants to pay.

https://www.nbcnews.com/business/consumer/private-equity-rolled-red-lobster-rcna153397