OpenAI mulls removing ‘AGI’ provision with Microsoft to unlock potential investments – report

OpenAI is in talks to remove a clause which hinders Microsoft’s (NASDAQ:MSFT) access to its advanced models when the AI company achieves “artificial general intelligence,” Financial Times reported.

Under the current agreements, when OpenAI creates AGI — defined as a “highly autonomous system that outperforms humans at most economically valuable work” — Microsoft’s access to such a technology would be void. OpenAI’s board would decide when AGI is achieved, the report added.

OpenAI is thinking of removing the provision from its corporate structure, enabling Microsoft to continue investing in and accessing all OpenAI technology after AGI is achieved, the report noted, citing people familiar with the matter.

A final decision has not been taken yet and options are being evaluated by the board, according to the report.

The provision was included to guard the potentially powerful technology from being misused for commercial purposes, giving rights to the technology to its nonprofit board. As per OpenAI’s website: “AGI is explicitly carved out of all commercial and IP licensing agreements.

However, the clause potentially curbs the value of its partnership for Microsoft, which has invested over $13B into the startup, and could disincentivise the tech giant from further investment, the report added.

More money will be required, considering the costs linked to developing advanced AI models in a race against bigger competitors, rivals such as Alphabet’s (GOOG) (GOOGL) Google, and Amazon (AMZN).

In October, OpenAI raised about $6.6B in new funding from investors including Microsoft and Nvidia (NVDA) giving it a valuation of $157B. The company is currently restructuring to become a public benefit corporation, the report noted.

Earlier this week, OpenAI’s CEO Sam Altman said the next major developments in the AI space will be more disruptive than people expect, while separately also noting that he does not think Elon Musk will use his political power with Donald Trump to harm rivals. On Thursday, the company also announced a $200 per month subscription plan for its new ChatGPT Pro option.

As part of the changes, OpenAI is in talks about new terms with investors, including its largest shareholder Microsoft, the report noted.

“We’ve also said that our intention is to treat AGI as a mile marker along the way. We’ve left ourselves some flexibility because we don’t know what will happen,” said Altman on Wednesday at the New York Times conference.

As part of the potential restructuring, OpenAI will also retain an independent not-for-profit entity that would have a stake in the new public benefit corporation and potentially a trust, the report added. The not-for-profit would have access to research and technology but would only focus on pursue the startup’s mission of benefiting humanity.

OpenAI did not disclose specifics of the discussions related to the potential restructuring but Bret Taylor, chair of OpenAI’s board, said the board of the non-profit was focused on fulfilling its fiduciary obligation by ensuring that the company is well-positioned to continue advancing its mission of ensuring AGI benefits humanity.

“While our work remains ongoing as we continue to consult independent financial and legal advisers, any potential restructuring would ensure the non-profit continues to exist and thrive, and receives full value for its current stake in the OpenAI for-profit with an enhanced ability to pursue its mission,” added Taylor.