OpenAI and Microsoft Redefine AGI: A $100 Billion Profit Benchmark

How OpenAI's Redefinition of AGI Could Change the World

OpenAI has introduced a new perspective on Artificial General Intelligence (AGI), signaling a significant shift in its strategic priorities. Historically focused on creating AI systems capable of surpassing human performance across diverse tasks, the company now ties AGI to a financial benchmark: achieving at least $100 billion in profits. This redefinition reflects OpenAI's evolving vision, emphasizing measurable economic impact over purely technical milestones. For you, this marks a pivotal moment in how AI's success is evaluated and its role in shaping the global economy. OpenAI's redefinition of AGI is deeply intertwined with its partnerships, competition, and vision for the future. From its high-stakes relationship with Microsoft to its legal tensions with Elon Musk, the company is navigating a complex web of challenges and opportunities. Whether you're excited about the possibilities of AI or concerned about its implications, this moment marks a turning point in the race to shape the "AGI economy." Traditionally, AGI referred to AI systems capable of performing a wide range of tasks at or above human levels. OpenAI's updated definition places profitability at the forefront, establishing a clear financial target as the primary measure of AGI's success. By doing so, the company aligns its goals with tangible economic outcomes rather than abstract technical achievements. For you, this redefinition underscores the growing importance of connecting AI advancements to real-world economic value, highlighting a shift from theoretical progress to practical applications. OpenAI's partnership with Microsoft is a cornerstone of its strategy to achieve AGI. With a substantial $10 billion investment, Microsoft has integrated OpenAI's technology into its Azure cloud platform, providing the computational power necessary for advanced AI development. This collaboration not only accelerates OpenAI's progress but also highlights the critical role of cloud infrastructure in modern AI research. For you, this partnership illustrates the delicate balance between collaboration and autonomy in the competitive race to develop AGI. OpenAI's plans to go public represent a significant evolution in its organizational structure. By adopting a hybrid model that combines nonprofit goals with for-profit ambitions, the company aims to secure the funding necessary to scale its operations while remaining committed to its mission of advancing AI responsibly. For you, this development signals OpenAI's intent to balance financial success with its broader vision for AI's role in society, making sure that profitability aligns with ethical and societal considerations. The AI landscape is becoming increasingly competitive, with figures like Elon Musk intensifying the race to dominate the field. Musk's advancements in AI and GPU infrastructure have added pressure on OpenAI to maintain its leadership position. Simultaneously, legal disputes between Musk and OpenAI introduce additional complexities to the company's journey. For you, this competitive environment demonstrates the high stakes involved in shaping the future of AI, where success depends on both innovation and strategic foresight. Achieving AGI requires immense computational resources, and OpenAI's reliance on Microsoft's Azure cloud infrastructure is both a strength and a limitation. While Microsoft's support provides access to innovative technology, it also constrains OpenAI's flexibility and independence. For you, this highlights the vital role of infrastructure in allowing the next generation of AI systems, where computational power serves as the foundation for innovation. OpenAI envisions a future where AGI drives profound economic transformation. By 2029, the company aims to develop advanced AI systems, including voice agents, humanoid robots, and AI-powered web browsers. These innovations have the potential to automate significant portions of the global economy, transforming industries and redefining how businesses operate. For you, this future represents both opportunities and challenges as AI reshapes the way we live and work, offering new possibilities while demanding careful consideration of its societal impact. If OpenAI achieves its profitability goals, it could emerge as one of the most valuable companies in the world. However, the broader implications of AGI extend far beyond individual corporations. By automating tasks and driving efficiency, AI has the potential to: For you, this highlights the necessity of preparing for a future where AI-driven transformation fundamentally alters the structure of economies and industries, requiring proactive strategies to address its challenges and maximize its benefits.

Report: OpenAI, Microsoft and defining AGI with profit benchmark

OpenAI and Microsoft have established an internal definition for Artificial General Intelligence (AGI). The two companies agreed to define AGI as a system capable of generating $100 billion in profits, as per a report by TechCrunch. Currently, OpenAI defines AGI as "systems that are generally smarter than humans". Moreover, it states on its website that AGI is "a highly autonomous system that outperforms humans at most economically valuable work." Reportedly, OpenAI and Microsoft signed an agreement in 2023 that defined AGI. However, under this definition, OpenAI is still a couple of years away from achieving it. This year, OpenAI expects to incur billions in losses and has informed investors that it won't become profitable until 2029. However, OpenAI CEO Sam Altman had stated, "My guess is we will hit AGI sooner than most people in the world think and it will matter much less," during an interview at The New York Times DealBook Summit in December. This detail is significant because Microsoft would lose access to OpenAI's technology once the startup achieves AGI, a term that is still ambiguous and interpreted in different ways by many. Some have speculated that OpenAI might announce AGI sooner to limit Microsoft's involvement, but the agreement ensures that Microsoft could retain access to OpenAI's models for a decade or more. Last week, there was some debate over whether OpenAI's o3 model represents a significant advancement toward achieving AGI. While the o3 model may outperform other existing AI models in certain areas, it also comes with substantial computational costs. These high expenses could pose a challenge for OpenAI and Microsoft, especially considering their profit-driven definition of AGI, which ties success to the ability to generate significant profits. OpenAI reportedly stated that its nonprofit board will decide whether AGI has been achieved. OpenAI launched as a nonprofit research organization in 2015. However, it plans to become a for-profit business. "Such a system is excluded from IP licenses and other commercial terms with Microsoft, which only apply to pre-AGI technology," the company states on its website. The definition of AGI as a system that can generate $100 billion in profits seems unusual and not aligned with the typical understanding of AGI in the field of artificial intelligence. AGI, by traditional definitions, is a form of AI that either matches or exceeds human cognitive abilities across a broad spectrum of tasks. This differs from narrow AI, which restricts itself to performing specific tasks. Simply put, it refers to a system that possesses the ability to understand, learn, and apply intelligence across a wide range of tasks, much like a human can, rather than being limited to a specific domain or task (unlike narrow AI). Defining AGI based on financial outcomes like $100 billion in profits is a commercial or business-driven perspective rather than a technical one. It doesn't capture the fundamental characteristics of AGI, which are generally related to cognitive abilities, adaptability, and autonomy.

Leaked Documents Show OpenAI Has a Very Clear Definition of â€~AGI’

OpenAI and Microsoft have a secret definition for "AGI," an acronym for artificial general intelligence, or any system that can outperform humans at most tasks. According to leaked documents obtained by The Information, the two companies came to agree in 2023 that AGI will be achieved once OpenAI has developed an AI system that can generate at least $100 billion in profits. There has long been a debate in the AI community about what AGI really means, or whether computers will ever be good enough to outperform humans at most tasks and wipe out major swaths of the economy. The term "artificial intelligence" itself is something of a misnomer because much of it is really just a prediction machine, taking in keywords and searching large amounts of data without really understanding the underlying concepts. But OpenAI has received more than $13 billion in funding from Microsoft over the years, and that money has come with a strange contractual agreement that OpenAI would stop allowing Microsoft to use any new technology it develops after AGI is achieved. OpenAI was founded as a nonprofit under the guise that its technology was supposed to benefit humanity. The idea behind cutting off Microsoft once AGI is attained is that AGI would cause harm to humanity in the hands of a for-profit company. In exchange for investing billions in a nonprofit, Microsoft's current agreement with OpenAI guarantees it a slice of profits until it reaches a predetermined cap somewhere in the tens of billions; the cap is meant to ensure most profit goes back to building products that benefit humanity, supposedly. As has been well documented at this point, OpenAI is no longer interested in this non-profit model, because the structure makes it difficult to raise more money and compete against other AI players. Since October, The Information says Microsoft and OpenAI have been negotiating changes to their arrangement, which also includes the tech giant serving as OpenAI's exclusive cloud hosting provider. Microsoft and OpenAI have been on diverging paths for some time now. It was recently reported that the latter has begun incorporating AI models developed in-house into its 365 Copilot product in order to improve cost and efficiency. It doesn't make sense for Microsoft to continue relying on OpenAI, an independent company, for technology that it believes will be the backbone of its productivity software going forward. Microsoft needs proprietary tech. OpenAI, for its part, is far away from achieving $100 billion in profit on technology whose true value remains speculative, which means it would likely have to keep giving its technology to Microsoft for a long timeâ€"not great when it looks like they are headed towards being competitors. And handing over large amounts of its revenue makes it less attractive to new investors, which it will need as it continues to burn cash. Getting rid of the cloud hosting agreement could also allow OpenAI to negotiate better hosting costs with an alternative provider.

OpenAI Must Earn $100 Bn to Prove AGI's Worth to Microsoft

Only when OpenAI's systems generate maximum profits, the company would have achieved AGI. Microsoft and OpenAI have agreed on a new, specific definition of AGI, or artificial general intelligence. According to a report, OpenAI can only achieve AGI when it has built a system that can generate $100 billion in profits. For Microsoft, the definition of AGI is highly important. Due to a clause in the agreement, once OpenAI achieves AGI, Microsoft will not be able to access the most powerful models from the AI startup. However, reports also surfaced that OpenAI is trying to remove the clause from the agreement. If the new definition of AGI is anything to go by, OpenAI is far from it. This year, OpenAI observed a $5 billion loss, with $3.7 billion in revenue. Reports also suggest that OpenAI will not turn into a profitable entity until 2029. A clear, objective definition of AGI was long overdue. When OpenAI released its most powerful o3 series of models, speculations arose about whether the model achieved AGI, given its performance on benchmarks. The o3 model scored almost 90% on the ARC-AGI benchmark, exceeding human performance. However, the creator of the benchmark, Francois Chollet., on X, stated, "I don't believe this is AGI -- there are still easy ARC-AGI-1 tasks that o3 can't solve." Sam Altman at the 2024 FinRegLab AI Symposium said, "As we get closer to it [AGI], I think it's become a less useful term. People use it to mean very different things." He indicated that for some, it means true superintelligence; some might believe AGI will be smarter than all of humanity put together. Heck, people believed that the o1 model was showing early signs of AGI. So for Microsoft, it means money. Of course, Satya Nadella wouldn't let Sam Altman declare AGI based on a subjective definition. That said, their relationship is facing a few cracks. Microsoft is set to decrease its dependency on OpenAI and plans to add more internal and third-party AI models to Microsoft 365 Copilot. This move stems from an attempt to reduce costs and diversify the underlying AI models. The company is also working on integrating its own models into 365 Copilot. Moreover, Microsoft might also soon invest in Anthropic, the AI company behind the Claude models, according to Dylan Patel, founder and chief analyst at SemiAnalysis. In a post on X, he predicted that the new funding round would increase the company's valuation to $59 billion.

OpenAI and Microsoft Said to Have a Strange Definition of AGI

AGI stands for artificial general intelligence After reaching AGI, OpenAI and Microsoft's agreement ends OpenAI is reportedly trying to remove the AGI clause OpenAI and Microsoft reportedly have a unique definition of what constitutes artificial general intelligence or AGI. As per the report, the two entities added a commercial indicator of AGI in last year's extension of their partnership. The new definition claims that an AI system that can generate at least $100 billion (roughly Rs. 854 lakh crore) in profits will be considered AGI. Interestingly, an earlier report claimed that the AI firm is also trying to remove the AGI clause from the agreement, which states that once AGI is reached, Microsoft will not have access to any of OpenAI's AI models. The Information reported on Thursday that the existing agreement between OpenAI and Microsoft has a strange definition of AGI. This agreement, which was announced in January 2023, was an extension of the 2019 partnership deal. Notably, this was a multiyear deal which also made Microsoft's Azure platform the exclusive cloud provider for OpenAI. The tech giant has reportedly invested $13 billion (roughly Rs. 1.1 lakh crore) in the AI firm. According to the report, AGI has been defined as an AI system that can generate at least $100 billion in profits. The agreement is said to not include any technical or philosophical benchmark. However, most scientists working with the technology agree that an AGI is an AI system that has the intelligence level and cognitive abilities of a human and can understand, learn, and apply knowledge across a wide range of tasks. Notably, AGI is different from superintelligence which is an intelligence system that far surpasses the abilities of a human. The phrasing of AGI in the agreement might be strange to some, but it does serve a purpose. As per the report, the existing multiyear agreement comes to an end after OpenAI reaches AGI. That means Microsoft does not get early access to any of the future AI models after that. Additionally, the tech giant also loses the exclusive right to be OpenAI's cloud provider. As per the publication, OpenAI is also trying to renegotiate the existing agreement, as it fears that the abovementioned AGI clause might prevent Microsoft from investing further in the company. However, to remove that, the AI firm will first have to convert into a for-profit company. The current negotiations with Microsoft, which is a major backer in the company, are reportedly on four areas. First is Microsot's equity stake in the for-profit company. Second is whether Azure continues to be OpenAI's exclusive cloud provider. Third, the tech giant's rights to the AI firm's future AI models. And last, whether the Windows maker will continue to take 20 percent revenue from the ChatGPT maker.

Microsoft and OpenAI have a financial definition of AGI: report | TechCrunch

Microsoft and OpenAI have a very specific, internal definition of artificial general intelligence (AGI) based on the startup's profits, according to a new report from The Information. And by this definition, OpenAI is many years away from reaching it. The two companies reportedly signed an agreement last year stating OpenAI has only achieved AGI when it develops AI systems that can generate at least $100 billion in profits. That's far from the rigorous technical and philosophical definition of AGI many expect. This year, OpenAI is reportedly set to lose billions of dollars, and the startup tells investors it won't turn a profit until 2029. 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. Some have speculated OpenAI will declare AGI sooner rather than later to box out Microsoft, but this agreement means Microsoft could have access to OpenAI's models for a decade or more. Last week, some debated whether OpenAI's o3 model was a meaningful step toward AGI. While o3 may perform better than other AI models, it also comes with significant compute costs, which bodes ill for OpenAI and Microsoft's profit-centric definition of AGI.