AI giants are no longer pretending! The ROI of enterprise-side applications has emerged, and in the end, it's still about "layoffs."

In the fierce competition in the AI field, Microsoft has thrown out a promotional stunt to win customers: "Our AI can help you 'get rid of' labor."

On December 9th, according to The Information, Jared Spataro, Chief Marketing Officer of Microsoft 365 Copilot, stated that CEOs and CFOs of companies want assurance that adopting AI can lead to savings in labor costs or reduce payments to external contractors. They said:

"We refuse to expand the budget for Microsoft Copilot AI until we see clear evidence that AI saves costs in other areas."

Spataro explained that this is why Microsoft has adopted this more straightforward sales pitch, "If you adopt AI services, you won't need as many employees," in other words, "The ultimate goal of AI development is to 'replace humans.'"

Microsoft is being honest: AI can save labor costs

Software executives, including those from Microsoft's competitors Google and Amazon, have long avoided publicly using the phrase "AI has the potential to replace labor" and have tried to alleviate people's concerns. In January of this year, Microsoft's CEO Satya Nadella stated that artificial intelligence would change "the nature of these jobs," while allowing untrained workers to more easily complete tasks such as software development, creating more job opportunities.

Researcher Lisette Espín Noboa explained that these companies typically do not say that jobs will be replaced because it is detrimental to their reputation and image, and they do not want to provoke protests.

However, when marketing to customers, Microsoft has begun to emphasize that AI can save labor costs. According to salespeople quoted by The Information, Microsoft executives stated that some AI tools are one of the reasons the company was able to maintain sales growth after laying off 10,000 employees last year, and executives have been encouraging salespeople to use this example to attract customers. Spataro said:

"We can increase the processing capacity of each customer service agent by 12% through Copilot. This is real money, which means we don't need to hire as many people."

Coincidentally, recently, OpenAI co-founder Sam Altman also candidly stated in an interview, "People will lose jobs because of AI; not everyone will like this impact, but it is coming, and it is a scientific achievement for humanity."

AI replaces outsourcing, achieving "cost reduction and efficiency improvement"

Analysts believe that although today's conversational AI still has limitations and can make mistakes, Microsoft can still point out that many companies have saved money through this technology.

For example, British fintech company Finastra, which has an annual revenue of $2 billion, has recently been using Microsoft's 365 Copilot to handle marketing tasks that typically require assistance from external agencies During an advertising interview event, Finastra used Copilot to analyze 4,000 pages of transcribed interviews, generating advertising copy that included executive testimonials. The company's Chief Marketing Officer Joerg Klueckmann stated:

"In the past, Finastra would hire external creative agencies and market research firms to produce such activities, which typically cost over $60,000 and took months. Now, Finastra only needs to pay a few marketing employees for using Copilot, at just $30 per person per month."

However, Klueckmann indicated that he does not expect this technology to lead him to cut the marketing team of over 60 people. He said, "I believe we will be able to produce more with the existing staff."

Additionally, some corporate legal departments are also using Microsoft's 365 Copilot and other AI applications to replace hiring external lawyers.

Not just outsourcing, internal "cuts" will also happen

Currently, some companies have begun using generative AI to replace the roles of IT support staff.

Semiconductor giant Broadcom has been considering the economics of its AI procurement. Stanley Toh, head of the company's IT support department, stated that by using AI startup Moveworks' software, the department has kept the number of IT support staff below 20 over the past five years, even as the company's total employee count grew from 10,000 to over 50,000.

Toh's team spends less than $2 million annually on AI, whereas if the number of IT staff grew in line with the overall employee count, it would require about $8 million per year, far exceeding $2 million. Toh said:

"When I need to renew contracts, this is the ROI I show to executives to justify why we are spending money on AI software. The pure motivation is to reduce costs and increase efficiency."

Salesforce founder Marc Benioff stated that the company will not add more software engineers next year, as it has already increased productivity by over 30% through Agent Force and other AI technologies used by engineering teams. However, the number of sales staff will increase, as the company needs to demonstrate the value that AI can achieve