OpenAI in Talks to Modify Microsoft Agreement

According to a Financial Times report, OpenAI is negotiating changes to its agreement with Microsoft (NASDAQ:MSFT) that currently limits Microsoft’s access to OpenAI's advanced models when artificial general intelligence (AGI) is achieved.

AGI is defined as a highly autonomous system that surpasses human performance in most economically valuable tasks. Currently, upon the achievement of AGI, Microsoft would lose access to this technology. The OpenAI board decides when AGI is reached.

OpenAI, now restructuring to become a public benefit corporation, is considering removing the clause, allowing continued investment and access for Microsoft after AGI is developed. Originally, this clause aimed to prevent the misuse of such powerful technology for commercial purposes, with AGI excluded from all commercial and IP licensing agreements on OpenAI's website.

Eliminating this provision is crucial for Microsoft, which has invested over $13 billion in OpenAI. A lack of change could deter future investments. Valued at $150 billion and led by Sam Altman, OpenAI is transitioning from a non-profit research lab to a profit-driven company, requiring significant capital to compete with tech giants like Google (NASDAQ:GOOGL) and Amazon (NASDAQ:AMZN).

At a New York Times (NYSE:NYT) conference, Altman discussed OpenAI's unprecedented capital needs and its evolving approach to AGI and commercialization.

OpenAI began accepting external investment in 2019, with Microsoft's $1 billion investment designated for licensing pre-AGI technologies to cover development costs. Investors were advised to treat their contributions as donations, given the financial uncertainties post-AGI.

OpenAI's shift towards profit-making has led to criticism, including from Elon Musk, an early supporter and co-founder who has since launched a competing startup, xAI. Musk has filed a lawsuit against OpenAI and Microsoft, accusing them of deceitful practices and seeking to nullify their partnership.

As part of the proposed changes, OpenAI will maintain an independent non-profit entity with a stake in the new public benefit corporation. This entity will access research and technology while focusing on OpenAI’s original mission to benefit humanity.

While OpenAI has not disclosed specific details regarding negotiations, Bret Taylor, chair of OpenAI's board, reiterated the board's commitment to its mission and the continued success of the non-profit entity amid restructuring. Microsoft has not yet commented on these developments.

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