OpenAI Considers Removing AGI Clause from Microsoft Agreement to Boost Investment

OpenAI Said to Consider Removing This Clause from Microsoft Agreement

OpenAI is reportedly considering removing a clause from its agreement with Microsoft in a bid to gain more investments from the tech giant. As per the report, the AI firm is discussing whether to remove the artificial general intelligence (AGI) clause, which states that the Redmond-based company will not get access to the ChatGPT maker's most advanced AI models once the latter reaches AGI. Notably, the measure is being considered to incentivise Microsoft to continue investing more money into OpenAI. According to a Financial Times report, the ChatGPT maker is planning whether or not to remove the crucial AGI clause from its agreement with Microsoft. Citing unnamed people with knowledge of the matter, the report claimed that the AI firm is internally discussing that the removal of the AGI clause could incentivise Microsoft to pour more funds into OpenAI. On its website, OpenAI has stated that the partnership with Microsoft does not include AGI technology, and any such technology is "explicitly carved out of all commercial and IP licensing agreements" in accordance with its nonprofit charter. Further, OpenAI determines when its generative AI system has achieved AGI. However, as per the report, OpenAI is now considering removing this clause. This would mean that Microsoft will gain access to the most advanced AI models of OpenAI even after the technology has gained human-like intelligence. Notably, several scientists including Geoffrey Hinton, who is considered the godfather of generative AI, have spoken publicly about the harms that may come as a result of the commercialisation of AGI. The move will also break the nonprofit charter of the AI firm. The report further highlighted recent statements made by OpenAI CEO Sam Altman at a New York Times conference, addressing the company structure. Altman reportedly said that the founding team was unaware that the company would become a product company and require massive capital to run. "If we knew those things, we would have picked a different structure," the publication quoted the CEO as saying. Notably, Microsoft has invested more than $13 billion (roughly Rs. 1.1 lakh crore) in OpenAI since the signing of the partnership. However, OpenAI is said to be in need of more financial funding due to the extremely high costs of developing new and more advanced AI models and running heavy processing on its cloud servers. The need is dire, especially considering the capital expenditure of rival companies such as Google and Amazon.

OpenAI seeks to unlock investment by ditching 'AGI' clause with Microsoft

OpenAI is in discussions to ditch a provision that shuts Microsoft out of its most advanced models when the start-up achieves "artificial general intelligence", as it seeks to unlock billions of dollars of future investment. Under current terms, when OpenAI creates AGI -- defined as a "highly autonomous system that outperforms humans at most economically valuable work" -- Microsoft's access to such a technology would be void. The OpenAI board would determine when AGI is achieved. The start-up is considering removing the stipulation from its corporate structure, enabling the Big Tech group to continue investing in and accessing all OpenAI technology after AGI is achieved, according to multiple people with knowledge of the discussions. A final decision has not been made and options are being discussed by the board, they added. The clause was included to protect the potentially powerful technology from being misused for commercial purposes, giving ownership of the technology to its non-profit board. According to OpenAI's website: "AGI is explicitly carved out of all commercial and IP licensing agreements." But the provision potentially limits the value of its partnership for Microsoft, which has pumped more than $13bn into OpenAI, and could disincentivise the Big Tech group from further investment. More funding will be needed given the eye-watering costs involved in developing advanced AI models in a race against deep-pocketed rivals such as Google and Amazon. The San Francisco-based group led by Sam Altman, which was recently valued at $150bn, is currently restructuring to become a public benefit corporation. That move represents a departure from its origins as a not-for-profit research lab. As part of the changes, OpenAI is discussing new terms with investors, including its largest shareholder Microsoft, according to multiple people familiar with the conversations. "When we started, we had no idea we were going to be a product company or that the capital we needed would turn out to be so huge," Altman told a New York Times conference on Wednesday. "If we knew those things, we would have picked a different structure." "We've also said that our intention is to treat AGI as a mile marker along the way. We've left ourselves some flexibility because we don't know what will happen," added Altman, who could receive a direct equity stake in OpenAI for the first time as part of the restructure. OpenAI began raising outside capital in 2019, receiving a $1bn investment from Microsoft that year. At the time, the company said it intended "to license some of our pre-AGI technologies" to Microsoft to cover the costs of developing cutting-edge AI. OpenAI has advised backers to consider their investments "in the spirit of a donation, with the understanding that it may be difficult to know what role money will play in a post-AGI world". But its steady move to becoming a for-profit entity has received strong criticism from rivals, including Elon Musk, an early backer and co-founder of OpenAI. The billionaire Tesla chief, who has since founded a rival start-up xAI, recently filed a lawsuit against OpenAI and Microsoft, accusing Altman of "deceit of Shakespearean proportions" and seeking to void its commercial partnership with Microsoft. As part of the proposed restructuring, the ChatGPT-maker will also retain an independent not-for-profit entity, which would have a stake in the new public benefit corporation and potentially a trust, according to people familiar with the discussions. The not-for-profit would have access to research and technology but solely focus on pursuing OpenAI's mission of benefiting humanity. OpenAI declined to comment on the specifics of negotiations around the restructuring but Bret Taylor, chair of OpenAI's board, said the board of directors of the non-profit "is focused on fulfilling our fiduciary obligation by ensuring that the company is well-positioned to continue advancing its mission of ensuring AGI benefits all of humanity". He added: "While our work remains ongoing as we continue to consult independent financial and legal advisers, any potential restructuring would ensure the non-profit continues to exist and thrive, and receives full value for its current stake in the OpenAI for-profit with an enhanced ability to pursue its mission." Microsoft declined to comment. Additional reporting by Madhumita Murgia in London

OpenAI Aiming to Eliminate Microsoft AGI Rule to Boost Future Investment | PYMNTS.com

As it stands now, the artificial intelligence (AI) startup has a provision that blocks Microsoft from accessing OpenAI's AGI, or AI that can think and perform tasks at or above the level of humans. However, OpenAI is considering removing that rule from its corporate structure, allowing Microsoft -- its biggest benefactor -- to continue to invest and access OpenAI technology once AGI is achieved, the Financial Times (FT) reported Friday (Dec. 6), citing sources familiar with the matter. According to the report, OpenAI initially added the provision to protect AGI from being misused for commercial purposes, giving ownership of the technology to its nonprofit board. "AGI is explicitly carved out of all commercial and IP licensing agreements," the company's website says. However, the FT said, this clause could limit the value of OpenAI's partnership with Microsoft, which has invested more than $13 billion into the startup. The company will need more funding as it competes with much wealthier rivals in the AI race, like Amazon and Google. OpenAI -- recently valued at $150 billion -- began as a nonprofit research lab but is now restructuring to transform into a public benefit corporation. Source told the FT that -- as part of these changes -- the company is discussing new terms with Microsoft and other investors. "When we started, we had no idea we were going to be a product company or that the capital we needed would turn out to be so huge," CEO Sam Altman told a New York Times conference last week, per the FT. "If we knew those things, we would have picked a different structure. "We've also said that our intention is to treat AGI as a mile marker along the way. We've left ourselves some flexibility because we don't know what will happen," added Altman, who could for the first time gain a direct equity stake in OpenAI under the restructure. It's also not clear when AGI will arrive, though Altman said at the same conference that it will happen "sooner than most people in the world think and it will matter much less." Earlier this year, OpenAI board member Adam D'Angelo predicted that AGI would happen "within five to 15 years," calling it a "very, very important change in the world when we get there."

OpenAI Considers Revising AGI Arrangement With Microsoft

OpenAI is reportedly considering altering a provision regarding Microsoft, it's largest corporate investor. OpenAI's current structure stipulates that if the AI startup achieves its goal of creating artificial general intelligence (AGI), described by the company as "a highly autonomous system that outperforms humans at most economically valuable work," such a system would not be included in its licensing agreements with Microsoft. Now, OpenAI is said to be considering lifting that stipulation in order to acquire more funding from Microsoft, the Financial Times reports. Microsoft has already invested over $13 billion in the Sam Altman-led unicorn, and Altman has recently claimed that AGI could be achieved within "a few thousand days." The provision was originally put in place due to safety concerns regarding AGI, which Altman had previously said could pose an existential danger to humanity if it were to fall into the wrong hands. In 2023 he told Time Magazine that "if AGI goes wrong, no bunker's going to help anyone." OpenAI's website states that Microsoft previously agreed to "leave AGI technologies and governance for the Nonprofit and the rest of humanity." Earlier this week at the New York Times' Dealbook conference, though, Altman struck a very different tone regarding AGI. When asked about the possibility of ending OpenAI and Microsoft's relationship due to the advent of AGI, Altman downplayed AGI's potential impact and safety risks, saying his guess is that "we will hit AGI sooner than most people in the world think, and it will matter much less. And a lot of the safety concerns that we and others express actually won't come at the AGI moment."

OpenAI considers changes to AGI access for Microsoft By Investing.com

According to a Financial Times report, OpenAI is in talks to modify a clause in its agreement with Microsoft (NASDAQ:MSFT) that currently restricts the tech giant from accessing OpenAI's most advanced models upon the development of artificial general intelligence (AGI). AGI is defined as a highly autonomous system superior to human performance in most economically valuable work. As it stands, once OpenAI achieves AGI, Microsoft would lose access to this technology, with the decision of AGI achievement resting with the OpenAI board. OpenAI, now restructuring to become a public benefit corporation, is contemplating removing this provision, which would allow continued investment and access for Microsoft even after AGI is reached. The clause was originally intended to prevent the misuse of such powerful technology for purely commercial purposes, as AGI is excluded from all commercial and IP licensing agreements on OpenAI's website. The potential elimination of this clause is significant for Microsoft, which has invested over $13 billion in OpenAI and may be deterred from further investment if the current terms remain. OpenAI, valued at $150 billion and led by Sam Altman, is in the midst of a transformation from a non-profit research lab to a profit-driven entity, necessitating more capital to compete with other tech giants like Google (NASDAQ:GOOGL) and Amazon (NASDAQ:AMZN) in the development of advanced AI models. During a New York Times (NYSE:NYT) conference on Wednesday, Altman discussed the unprecedented capital requirements and the company's evolution, indicating a shift in OpenAI's approach to AGI and its commercialization. OpenAI first started accepting outside investment in 2019, with Microsoft's $1 billion investment earmarked for licensing pre-AGI technologies to help cover development costs. Investors were advised to view their contributions as akin to donations, given the uncertainty of money's role in a post-AGI scenario. However, OpenAI's move towards profit orientation has drawn criticism, including from Elon Musk, an early supporter and co-founder, who has since established a competing start-up, xAI. Musk has filed a lawsuit against OpenAI and Microsoft, alleging deceit by Altman and seeking to invalidate their commercial 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 have access to research and technology but will focus on OpenAI's original mission to benefit humanity. While OpenAI has not provided details on the ongoing negotiations, Bret Taylor, chair of OpenAI's board, emphasized the board's commitment to the company's mission and the continued existence and success of the non-profit entity within any restructuring. Microsoft has not issued a statement regarding these developments.