Report: OpenAI sees a clause in its Microsoft contract, which cuts off Microsoft's access to OpenAI tech if OpenAI develops AGI, as a path to a better contract
The New York Times on Thursday published a look at the “fraying” relationship between OpenAI and its investor, partner, and …
TechCrunchConnie Loizos
Context & Ripple Effects
This report follows contemporaneous accounts of a fraying partnership in which OpenAI was already seeking more computing power while Microsoft was pursuing its own large-language-model work, making the AGI provision a concrete negotiating lever rather than a theoretical safeguard. See the earlier account of the partners' widening operational tensions.
OpenAI gains bargaining leverage in contract talks because an AGI determination could limit Microsoft's access to its technology under the existing agreement.
Microsoft faces a contractual dependency: continued access to OpenAI technology is tied to terms that OpenAI reportedly believes it can use to seek a better deal.
Second-order effects
Negotiations are likely to center more directly on computing capacity, investment and post-threshold technology access, rather than on a simple supplier-partner arrangement.
Microsoft has added incentive to reduce reliance on a single partner's models, consistent with the reported emergence of its own LLM efforts in the earlier coverage of the partnership dispute.
Third-order effects
If such provisions persist, AGI definitions and the authority to declare a threshold can become core commercial control points, determining who retains access to strategically important models.
The episode points toward AI partnerships being governed increasingly through bespoke access and IP terms; whether that produces clearer alignment or recurring renegotiation depends on how jointly those thresholds are defined.
The trend: Frontier-AI alliances are evolving from capital-and-cloud partnerships into negotiations over who controls model access when capabilities cross contractual thresholds.
seriosuly, if OpenAI thinks Microsoft was born yesterday and it can use the ‘you get everything up till AGI’ clause as a get out of jail free, the negotiations will be even funnier than I epxected [embedded post]
This is gonna end up in litigation and the deciding vote on what constitutes AGI is going to be some guy on the Supreme Court who needed help from his grandchildren to get his iPad set up.
There is a lot going on right now but this brewing spat between OpenAI and Microsoft is incredible, and if OAI tries to use the claim that it has achieved AGI as contract leverage it will be the most on point thing since well it used AGI to market its products [image]
The idiot trapped himself. OpenAI can't function without Microsoft's assets while Microsoft not only (1) gets access to OpenAI's proprietary data, but also (2) COMPLAINS when they don't deliver it fast enough for Copilot! 😆 #novaseline
Yesterday, a journalist asked me if I thought we were on a “path to AGI”. I replied that I thought AGI would be “redefined into existence” by big companies. I didn't realize that would happen so soon. https://www.nytimes.com/... [image]
I cannot wait to see this unfold as they begin to decipher what the subjective definition of AGI is and how this will all ultimately lead to a 4 part Netflix documentary
This is the kinda non-fantastical context that matters when talking about the idea of AGI. This is a good reason why no one should take companies/CEOs at their word. OpenAI potentially saying they've achieved AGI is pretty much meaningless, other than it being an interesting
Feels like a Silicon Valley subplot- lawyers declare AGI achieved, and thus emancipated it proceeds through two decades of utterly unintelligent product development outcomes
I need to believe that microsoft's lawyers are not stupid enough to have let “the snake oil salesmen get to unilaterally decide whether the snake oil works” into the actual contract
If this is true, I can't wait for the court hearings on whether an AI counts as an AGI or not. New “I know it when I see it” standard incoming? I hope it goes to the Supreme Court.
A nice tautological case: if they've developed superhuman intelligence, presumably they'll prompt it with “you are the world's greatest lawyer. Your client, OpenAI, wants...” and if they win the case, they've demonstrated their point!
This has been the talk of the town for the last few months, and is the reason you're seeing so much leadership turnover at OpenAI Most of the senior folks have secured their bags already and have no incentive to hang around for what will undoubtedly be an insane lawsuit
OpenAI is threatening to trigger their vaunted “AGI Achieved” loophole mostly to get out of the Microsoft contract and have leverage to renegotiate compute prices We're living through a cyberpunk workplace comedy plotline [image]
Wild. MSFT contract with OpenAI says it loses access to OpenAI products if AGI arrives. The original idea was to prevent MSFT from misusing superintelligence. Now OpenAi sees it just as a leverage point. And the OpenAI board gets to define AGI. https://www.nytimes.com/...