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The next chapter of the Microsoft–OpenAI partnership

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Re: The next chapter of the Microsoft–OpenAI partnership

#41

Post by nonethewiser »

conartist6 wrote: post #20
healsdata wrote: post #15

Earlier quoted context omitted.

> The two companies reportedly signed an agreement [in 2023] stating OpenAI has only achieved AGI when it develops AI systems that can generate at least $100 billion in profits. https://techcrunch.com/2024/12/26/microsoft-and-openai-have-...

So what, there just won't be a word for general intelligence anymore, you know, in the philosophical sense?

Well this is why it's framed that way:

>This is an important detail because Microsoft loses access to OpenAI’s technology when the startup reaches AGI, a nebulous term that means different things to everyone.

Not sure how OpenAI feels about that.

Re: The next chapter of the Microsoft–OpenAI partnership

#42

Post by makestuff »

cjbarber wrote: post #14

> Microsoft holds an investment in OpenAI Group PBC valued at approximately $135 billion, representing roughly 27 percent on an as-converted diluted basis It seems like Microsoft stock is then the most straightforward way to invest in OpenAI pre-IPO. This also confirms the $500 billion valuation making OpenAI the most valuable private startup in the world. Now many of the main AI companies have decent ownership by pu…

if you want to invest in open ai I think you can just buy it on NASDAQ private markets.

Re: The next chapter of the Microsoft–OpenAI partnership

#43

Post by respondo2134 »

eggbrain wrote: post #9

If we assume token providers are becoming more and more of a commodity service these days, it seems telling that OpenAI specifically decided to claw out consumer hardware. Perhaps their big bet is that their partnership with Jony Ive will create the first post-phone hardware device that consumers attach themselves with, and then build an ecosystem around that?

this would be an incredibly tough play. We've seen few success stories, and even when the product is good building the business around them has often failed. Most of the consumer plays are terrible products with weak execution and no real market. I have no doubt they could supplement lots of consumer experiences but I'm not sure how they are more than a commodity component in that model. I'm a die-hard engineer, but equating the success of the iphone to Ive's design is like saying the reason there were so many Apple II's in 80's homes and classrooms was because of Woz's amazing design.

Re: The next chapter of the Microsoft–OpenAI partnership

#45

Post by drexlspivey »

healsdata wrote: post #10

I'm not savvy on investment terms, but most of these bullet points seem like a loss for Microsoft. What's the value in investing in a smaller company and then giving up things produced off that investment when the company grows?

Yeah poor microsoft, they invested $1B in 2019 and it’s now worth $135B

Re: The next chapter of the Microsoft–OpenAI partnership

#46

Post by _2d30 »

_2d30 wrote: post #36

Can anyone point me to whether or not the OAI non-profit holds voting control or not after the recapitalization? I've read this but it's extremely vague: https://openai.com/index/built-to-benefit-everyone/ As is this: https://openai.com/our-structure/ Especially so if the Non-profit foundation doesn't retain voting control, this remains the greatest theft of all time. I still can't quite understand how it should at a…

Nevermind, looks like the nn-profit gave up voting control lol:

"All equity holders in OpenAI Group now own the same type of traditional stock that participates proportionally and grows in value with OpenAI Group’s success. The OpenAI Foundation board of directors were advised by independent financial advisors, and the terms of the recapitalization were unanimously approved by the board."

Truly, truly the greatest theft from mankind in history and they dress it up as if the non-profit is doing anything other than giving away the most valuable startup in history for a paltry sum.

Credit where credit is due, Sam Altman is the greatest dealmaker of all time.

Will be interesting if we get to hear what his new equity stake is!

Re: The next chapter of the Microsoft–OpenAI partnership

#47

Post by conartist6 »

cogman10 wrote: post #40
conartist6 wrote: post #20

Earlier quoted context omitted.

So what, there just won't be a word for general intelligence anymore, you know, in the philosophical sense?

lol, this is "autopilot" and "full self driving" all over again. Just redefine the terms into something that's easy to accomplish but far from the definition of the terms/words/promises.

I know, they could get a big banner that says MISSION ACCOMPLISHED.

Re: The next chapter of the Microsoft–OpenAI partnership

#48

Post by Shank »

Oras wrote: post #31

> OpenAI has contracted to purchase an incremental $250B of Azure services, and Microsoft will no longer have a right of first refusal to be OpenAI’s compute provider. So OpenAI could be on Google (GCP) and AWS, and possibly Claude and Gemini on Azure? that could be a good thing. I use OpenRouter in multiple applications, the practicality of having one provider to host all possible LLMs is such a win to try and itera…

The API offerings are still only on Azure. It just means OpenAI doesn’t have to buy compute exclusively from Microsoft.

Re: The next chapter of the Microsoft–OpenAI partnership

#49

Post by gostsamo »

healsdata wrote: post #10

I'm not savvy on investment terms, but most of these bullet points seem like a loss for Microsoft. What's the value in investing in a smaller company and then giving up things produced off that investment when the company grows?

If there is need of more capital, you either keep your share without the capital injection and the share goes to zero or you let in more investors, dilute your share, but its overall value increases. Or you can let in more people and sign an agreement that part of the new money will be paid to you in the form of services that you provide.

Re: The next chapter of the Microsoft–OpenAI partnership

#50

Post by _jab »

Many questioning why Microsoft would agree to this, but to me the concessions they made strike me as minor.

> OpenAI remains Microsoft’s frontier model partner and Microsoft continues to have exclusive IP rights and Azure API exclusivity

This should be the headline - Microsoft maintains its financial and intellectual stranglehold on OpenAI.

And meanwhile, while vaguer, a few of the bullet points are potentially very favorable to Microsoft:

> Microsoft can now independently pursue AGI alone or in partnership with third parties.

> The revenue share agreement remains until the expert panel verifies AGI, though payments will be made over a longer period of time.

Hard to say what a "longer period of time" means, but I presume it is substantial enough to make this a major concession from OpenAI.

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