Microsoft and OpenAI Revise AGI Trigger Clause for 137 Billion Dollar Investment

IntelliCapital APP has learned that Microsoft (MSFT.US) is in deep talks with OpenAI to sign a new agreement, which could ensure its continued access to AI technology crucial to the company's future development.

A source close to the matter revealed that Microsoft and OpenAI are negotiating a revised cooperation protocol to remove the current limitation that would see Microsoft lose some of OpenAI's key AI technologies upon reaching AGI milestones.

The report highlights that even if ChatGPT's parent company, OpenAI, believes it has achieved its goal of building "general-purpose AI" (AGI), Microsoft can still continue using OpenAI's latest AI models and other important AI technologies.

According to the current agreement, once OpenAI achieves AGI, it will be considered a major milestone, at which point Microsoft will lose partial rights to use OpenAI technology. However, under the new clauses being discussed, even if OpenAI believes it has achieved a stronger form of AI (AGI), Microsoft can still use OpenAI's latest models and other core AI technologies.

Representatives from both sides have been meeting regularly to discuss the terms of the agreement, which could be finalized within several weeks. The two companies' cooperation has opened up new possibilities in the field of artificial intelligence.

Microsoft built a super-AI server cluster for OpenAI to develop its large language models behind ChatGPT. In return, Microsoft gained the right to integrate OpenAI's core AI technology into its software products.

OpenAI aims to become a profit-making company and hopes to negotiate a better revenue-sharing agreement with Microsoft, as well as adjust Microsoft's access to its intellectual property rights; meanwhile, Microsoft wishes to continue using OpenAI's core AI technology after the current contract expires in 2030.

The report highlights that OpenAI also has concerns: the company wants to ensure that it can still receive sufficient resources and retain significant ownership even if Microsoft acquires a certain percentage of its shares.

This young startup hopes that, even if Microsoft obtains similar AI technology, OpenAI can still provide customers with different products based on its models. OpenAI plans to expand its services to more clients, including government clients who do not use Microsoft Azure cloud computing platforms.

Moreover, OpenAI wants to ensure that Microsoft complies strictly with security standards when deploying its technology, especially as it approaches AGI milestones.

OpenAI publicly defines AGI as a "highly autonomous system capable of surpassing human capabilities in most economically valuable work." The current contract contains clauses related to the AGI milestone, which can be triggered by technological or commercial achievements, according to media reports citing informed sources.

The board of directors at OpenAI has the power to decide when the company reaches the AGI milestone. According to this scenario, Microsoft will lose its rights to use AI technologies developed after reaching the AGI milestone.

The report highlights that Microsoft has agreed to forego OpenAI's knowledge property rights worth $65 billion for the partial acquisition of io, a company co-founded by Jony Ive, the designer of iPhone's core. However, Microsoft has not expressed support for OpenAI's proposed acquisition of Windsurf, an AI coding startup.

Windsurf sold its AI programming tools to competitors with Microsoft products and did not want Microsoft to obtain its knowledge property rights; OpenAI tried to persuade Microsoft to accept the related clauses but ultimately failed. Subsequently, Windsurf's co-founders and some employees joined Alphabet, the parent company of Google, for $2.4 billion.

Both sides are negotiating on the stake of OpenAI that Microsoft will hold after the reorganization; discussion ranges from 30% to below. The Financial Times has previously reported on the core stakeholder ratio discussion.

If Microsoft believes the shareholding and other contract changes are still insufficient, it is willing to terminate negotiations and maintain current contract clauses.