Hey Amy, I heard something about TikTok spending a lot of money on AI. What's that all about?

Oh, it's really interesting, Sam! TikTok is spending about $20 million every month on AI services from Microsoft. That's a huge amount!

Wow, that is a lot! But why does TikTok need AI from Microsoft? I thought TikTok was just for making fun videos.

Well, TikTok uses AI for many things, like suggesting videos you might like or making the app work better. Microsoft provides this AI through something called cloud services.

Oh, I see. So Microsoft is making a lot of money from this, right?

Yes, they are! In fact, TikTok's spending makes up about 25% of Microsoft's income in this area. But there's a catch – Microsoft is worried about relying too much on just one big customer.

Why is that a problem? Isn't it good to have a big customer?

It can be good, but it's also risky. What if TikTok decides to make its own AI or use someone else's? Microsoft could lose a lot of money very quickly.

Oh, I get it. So what is Microsoft doing about this?

They're trying to get more big companies to use their AI services. For example, they're working with Walmart and a company called Intuit. They're also making new AI tools for things like writing and coding.

That sounds smart. Is it working?

It seems to be helping, but it's still a challenge. Microsoft is making more money from their cloud services, but not as much as some people expected. They're hoping their AI investments will pay off in the future.

This AI stuff sounds complicated but important. Do you think other companies will start spending lots of money on AI too?

That's a great question, Sam! Many companies are already investing in AI. As AI becomes more powerful and useful, we'll probably see more businesses spending money on it. It's becoming a big part of how many companies work.