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The Other Bubble

Buried in the 8000 words I wrote last week was a worrying story — that Microsoft considered drastic measures to free up  capacity in its US-based servers for GPUs to power the AI boom. In an email shared with me by a source from earlier this year, Microsoft's senior leadership team

I need you to understand that while companies like OpenAI and Anthropic are the more public faces of generative AI, and consumer-facing tools like ChatGPT are the PR vehicles that catapulted them into relevance, the actual revenue — the real dollars — that have underpinned almost every hyper-growth market have come from finding a way to sell it at a monthly cost to the enterprise. As a result, it's just cheaper to use Microsoft's faux-Tableau no matter how hard it Tablows, because it's part of a bunch of other apps that you need like Word, PowerPoint, and Sharepoint, an "enterprise content management platform" that everybody hates that allows you to build internal documents and host files in a way that makes it near-impossible to share anything outside of your organization. Year-over-year revenue growth has slowed in almost every major SaaS company that reports it - it's down at Atlassian, DataDog(where it's effectively flat, with slight signs of life), Okta, Salesforce, Snowflake, Hubspot, ServiceNow, Workday, and Shopify, and in almost every case has been trending steadily downward since 2022.

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