OpenAI and Microsoft have a hidden meaning 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 Informationthe two companies agreed in 2023 that AGI will be achieved once OpenAI has developed an AI system that generates at least $100 billion in revenue.

There has been a long-standing debate in the AI ​​community about what AGI actually means, or whether computers will ever be good enough to surpass humans in most tasks and wipe out large parts of the economy.

The term “artificial intelligence” itself is something of a misnomer because most of it is just a prediction machine, extracting 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 comes with a strange contractual agreement that OpenAI will stop letting Microsoft use any new technology it developed after achieving AGI.

OpenAI was founded as a nonprofit under the guise that it would use its influence, and any AGI developed, to create products that would benefit all humanity. The idea behind Microsoft cutting the chance to acquire AGI is that direct access to OpenAI intellectual property would unduly concentrate the power of the tech giant. Instead of investing billions in a nonprofit, then, Microsoft’s current agreement with OpenAI guarantees it a slice of the profits until it reaches a predetermined cap somewhere above which is ten billion; the cap is intended to ensure that most of the profits will ultimately go back into making products that benefit the general public, supposedly. This is all pie-in-the-sky talk since, again, the AI ​​isn’t very strong at this point.

OpenAI’s non-profit structure has long been considered a joke, and it’s no surprise that the company announced this year its intentions to pivot to a for-profit structure (while continuing its mission to benefit all humanity, whatever), because the current nonprofit structure does. It is difficult to raise more money and compete against other AI players. Because of this, The Information says Microsoft and OpenAI have negotiated several changes to their arrangement that will take place if the company restructures. Microsoft now also serves as OpenAI’s exclusive cloud hosting provider, and OpenAI may want to end that as well as stop profit sharing and shift to simply giving Microsoft straight equity.

Microsoft and OpenAI have long been on different paths. It was recently reported that the latter has begun home-made AI models included to its 365 Copilot product to improve cost and efficiency. It doesn’t make sense for Microsoft to continue to rely on OpenAI, an independent company, for the technology it believes will be the backbone of its productivity software in the future. Especially among all those chaos and drama which surrounds OpenAI. Microsoft needs its own proprietary tech to chart its own path.

OpenAI, for its part, is far from reaching the $100 billion profit in technology whose true value remains speculative, which means it will likely have to continue to provide its technology to Microsoft for a long time—not a good one at that. they lead. to be competitors. And handing over a large amount of its income makes it less attractive to new investors, which it needs to be continues to burn money. Removing the cloud hosting agreement may also allow OpenAI to negotiate better hosting costs with an alternative provider.