So now OpenAI is committed to spending $550 billion dollars? ($300B to Oracle and $250B to MS). If it currently has ~$10B in revenue / year, how on earth can it meet these commitments?
The next chapter of the Microsoft–OpenAI partnership
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Re: The next chapter of the Microsoft–OpenAI partnership
#72> 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.
Not everyone can "just buy it". Investing in MSFT is accessible to many more people than private markets.
Re: The next chapter of the Microsoft–OpenAI partnership
#73I'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?
> and then giving up things produced off that investment when the company grows?
An investor can be stubborn about retaining all rights previously negotiated and never give them up... but that absolutist position doesn't mean anything if the investment fails.
OpenAI needs many more billions to cover many more years of expected losses. Microsoft itself doesn't want to invest any more money. Additional outside investors don't want to add more billions in funding unless Microsoft was willing to give up a few rights so that OpenAI has a better competitive position against Google Gemini, Anthropic, Grok etc.
When a startup is losing money and desperately needs more capital, a new round of investors can chip away at rights the previous investor(s) had. Why would previous original investors voluntarily agree to give up any rights?!? Because their investment is at risk if the startup doesn't get a lot more money. If the original investor doesn't want to re-invest again and would rather others foot the bill, they sometimes have to be a little flexible on their rights for that to happen.
Re: The next chapter of the Microsoft–OpenAI partnership
#74> 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…
I think it's a bit late for that. Also, you have to consider the size of Microsoft relative to its ownership of OpenAI, future dilution, and how Microsoft itself will fare in the future. If, say, Microsoft is on a path towards decreasing relevance/marketshare/profitability, any gains from its stake in OpenAI may be offset by its diminishing fortunes.
Reminds me of how Yahoo had a valuation in the negative billions with their Alibaba holdings taken into account:
https://www.cbsnews.com/news/wall-street-says-yahoos-worth-l...
Re: The next chapter of the Microsoft–OpenAI partnership
#75> 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…
I think it's a bit late for that. Also, you have to consider the size of Microsoft relative to its ownership of OpenAI, future dilution, and how Microsoft itself will fare in the future. If, say, Microsoft is on a path towards decreasing relevance/marketshare/profitability, any gains from its stake in OpenAI may be offset by its diminishing fortunes.
> If, say, Microsoft is on a path towards decreasing relevance/marketshare/profitability
That’s a big if. I see a lot of people in big enterprises who would never even consider anything other than Microsoft and Azure.
Re: The next chapter of the Microsoft–OpenAI partnership
#76Microsoft’s announcement: https://blogs.microsoft.com/blog/2025/10/28/the-next-chapter... Also: Built to Benefit Everyone — by Bret Taylor, Chair of the OpenAI Board of Directors https://openai.com/index/built-to-benefit-everyone
> Built to Benefit Everyone Whats my share then?
You get to contribute your data for the Moloch.
Re: The next chapter of the Microsoft–OpenAI partnership
#77Earlier quoted context omitted.
This. This sentence reached off the page and hit me in the face. It only just then became obvious to me that to them it's a question of when, in large part because of the MS deal. Their next big move in the chess game will be to "declare" AGI.
This is phenomenally conceited on both companies’ parts. Wow.
Don't worry, I'm sure we can just keep handing out subprime mortgages like candy forever. Infinite growth, here we come!
Re: The next chapter of the Microsoft–OpenAI partnership
#78Many 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…
> 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.
Depends on how this is meant to be parsed but it may be parsed to be a concession from MSFT. If the total amount of revenue to be shared is the same, then MSFT is worse off here. If this is meant to parse as "a fixed proportion of revenue will be shared over X period and X period has increased to Y" then it is an OAI concession.
I don't know the details but I would be surprised if there was a revenue agreement that was time based.
Re: The next chapter of the Microsoft–OpenAI partnership
#79> Once AGI is declared by OpenAI, that declaration will now be verified by an independent expert panel.
> Microsoft’s IP rights for both models and products are extended through 2032 and now includes models post-AGI, with appropriate safety guardrails.
Does anyone really think we are close to AGI? I mean honestly?
Re: The next chapter of the Microsoft–OpenAI partnership
#80> Once AGI is declared by OpenAI, that declaration will now be verified by an independent expert panel. I wonder what criteria that panel will use to define/resolve this.
> 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 they can just introduce ads in ChatGPT responses, make $100 billion, and call that AGI?