Microsoft pursues contract for AI guarding against Advanced General Intelligence with OpenAI

In a significant move, Microsoft and OpenAI are reportedly in advanced negotiations for a new agreement, according to a Bloomberg report citing anonymous sources. The discussions aim to restructure OpenAI, which could enable Microsoft to receive formal equity and potentially significant financial returns.

The transition of OpenAI into a fully for-profit company is a key aspect of the negotiations. This change could result in Microsoft securing a larger ownership stake in the restructured OpenAI, with the potential equity stake being in the "low- to mid-30%" range.

The current agreement between Microsoft and OpenAI, which is scheduled to expire in 2030 or upon OpenAI's declaration of achieving artificial general intelligence (AGI), has been instrumental in Microsoft's Azure OpenAI Service and the integration of OpenAI's models into Copilot across various platforms.

However, the current arrangement restricts OpenAI from fully commercializing its products or raising capital. As part of the new agreement, OpenAI desires to remove these constraints.

One of the main objectives of the negotiations is to secure Microsoft's continued access to OpenAI's technology, even if OpenAI achieves AGI. OpenAI also aims to secure guarantees from Microsoft regarding the safe deployment of its technology, particularly as AGI becomes a closer reality.

The negotiations have been ongoing for several months to facilitate OpenAI's transition into a fully commercial enterprise. A premature cutoff of access to OpenAI's technology would be a significant strategic setback for Microsoft.

It's worth noting that OpenAI is currently structured as a mission-driven nonprofit organisation with oversight over a capped for-profit entity. Microsoft has already invested $13.75 billion in OpenAI and holds rights to some of its intellectual property.

In a separate development, Microsoft has reportedly found a major privacy flaw in Apple's Spotlight search. This fact, however, is not directly related to the discussions between Microsoft and OpenAI.

As the negotiations continue, both parties are expected to provide updates on the progress and the potential impact of the new agreement on their respective businesses and technologies.

Microsoft pursues contract for AI guarding against Advanced General Intelligence with OpenAI