OpenAI and Microsoft have announced a significant restructuring of their partnership, involving a tentative agreement granting OpenAI's non-profit a $100 billion equity stake in its for-profit subsidiary. This move, while aiming to solidify their collaboration, has drawn considerable attention from regulators and sparked controversy. The deal follows months of negotiations and marks a new phase in their relationship, which began with a $1 billion Microsoft investment in 2019. This initial investment gave Microsoft exclusive access to OpenAI's computing power, a relationship that fueled the development and integration of OpenAI's technology into Microsoft's own AI products, notably influencing advancements in ChatGPT. However, recent shifts saw OpenAI forging partnerships with other companies, like Oracle, to diversify its computing infrastructure, leading to speculation about a potential divergence from its initial agreement with Microsoft.
The proposed restructuring has raised concerns among regulators, including California Attorney General Rob Bonta and Delaware Attorney General Kathy Jennings, who are investigating the implications of OpenAI's financial and governance changes. Their concerns center on safeguarding charitable assets and ensuring OpenAI's stated mission of developing AI for the benefit of humanity remains paramount. The $100 billion stake's potential impact on the nonprofit's control over the for-profit entity remains unclear, fueling further regulatory scrutiny.
This deal also comes amidst ongoing legal battles. Elon Musk, a co-founder of OpenAI, has filed a lawsuit challenging the restructuring, alleging that OpenAI has deviated from its original commitment to prioritize the societal benefit of AI development. A crucial element of the agreement involves OpenAI's definition of Artificial General Intelligence (AGI) – the point at which AI surpasses human capabilities in most economically valuable tasks. Reaching AGI, according to previous agreements, would significantly alter Microsoft's commercial rights to OpenAI's technology. The current agreement's specifics regarding AGI and its implications for both companies' future strategies remain undisclosed. While the companies maintain they are 'actively working to finalize contractual terms,' the deal's complexity and the regulatory scrutiny it faces suggest a long road ahead before finalization.
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Originally published at: https://finance.yahoo.com/news/openai-reaches-agreement-microsoft-change-163335278.html
