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A lot of that billions of capital is simply Azure compute credits though.

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Those credits equate to billions of $ in real compute expense for MSFT.

I would hope that a billion in credits would not represent a billion in expenses for Microsoft.

They're giving up all the profits from whoever they would have been sold to otherwise.

So it adds up the same.

So when they give you $100 in free credits they are losing $100.

Microsoft giving these credits to OpenAI doesn't mean some other customer won't buy the Azure credits they planned on buying. So I don't see how what you write makes sense.

At least assuming Microsoft hasn't run out of capacity in their data centers. I know Azure sometimes have capacity issues but those issues are intermittent and not say 5 year long (or whatever the windoe is when it comes to consuming these credit)

> doesn't mean some other customer won't buy the Azure credits they planned on buying

Yes it does, because we're taking about GPU availability that is absolutely highly constrained across the economy.

If we were talking about CPU credits instead, then you're right that Microsoft would be paying/losing merely cost.

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