Microsoft, OpenAI near deal to preserve AI access past AGI

Microsoft and OpenAI are currently in advanced negotiations to finalize a new partnership agreement that would allow Microsoft to maintain continuous access to OpenAI’s technology even after OpenAI achieves artificial general intelligence (AGI), a milestone at which AI attains human-level cognitive abilities across diverse tasks.

Here is the key points about the deal include:

• Current Contract Limitation: Under the existing agreement, Microsoft would lose rights to new OpenAI technology once OpenAI’s board officially determines that AGI has been reached, which poses a significant barrier for Microsoft’s AI strategy, especially as its products like Azure, Microsoft 365 Copilot, and GitHub Copilot heavily depend on OpenAI’s models.
• Equity and Financial Terms: Microsoft is seeking to increase its equity stake in OpenAI’s restructured company, aiming for a low- to mid-30% range, while renegotiating revenue sharing and IP rights as OpenAI shifts from a nonprofit to a for-profit structure. OpenAI’s planned $40 billion funding round, with $20 billion from SoftBank, hinges partly on these governance changes.
• Definitions and Licensing: The talks also involve clarifying what exactly constitutes the AGI milestone, how Microsoft can have ongoing licensed access to advanced AI systems beyond AGI, and embedding oversight and safety mechanisms related to the use of the technology.
• Strategic Significance: Securing this deal is crucial for Microsoft to preserve its competitive edge in AI, particularly for its enterprise software and cloud products worth billions. It also clears a major hurdle for OpenAI’s transition into a more commercial enterprise model, enabling both to capitalize on the evolving AI landscape.
• Potential Obstacles: Despite positive progress, challenges remain including potential regulatory scrutiny and a lawsuit by Elon Musk challenging OpenAI’s for-profit transition and governance changes.

The negotiations have been ongoing for several months with frequent meetings and could conclude within weeks. OpenAI has not publicly commented, and Microsoft has likewise withheld comment on the specifics of the talks.

Microsoft aims to secure a long-term deal granting it continuous access to OpenAI’s cutting-edge AI technologies through and beyond the achievement of AGI, restructuring their partnership to reflect new commercial realities and safeguard Microsoft’s AI-driven product ecosystem. This agreement will shape the future control and commercialization of transformative AI technologies.