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Microsoft’s $100B Profit Clause Redefines AGI Reality

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OpenAI and Microsoft have established a distinctive interpretation of artificial general intelligence (AGI), according to recent reports. The two organizations introduced a commercial metric for AGI in the extension of their partnership last year. This new definition posits that an AI system will be deemed AGI if it can generate profits of at least $100 billion (approximately Rs. 854 lakh crore). In a separate development, earlier reports suggested that OpenAI is considering removing the AGI clause from their agreement, which restricts Microsoft’s access to OpenAI’s models once AGI is achieved.

OpenAI and Microsoft’s AGI Definition Highlights Financial Ambition

The Information reported on Thursday that the current agreement between OpenAI and Microsoft includes an unusual definition of AGI. Announced in January 2023, this agreement is an extension of their original partnership from 2019. This multiyear deal also designates Microsoft’s Azure platform as the exclusive cloud provider for OpenAI, with the tech company reportedly investing $13 billion (around Rs. 1.1 lakh crore) into the AI firm.

As detailed in the report, AGI has been defined as an AI capable of generating profits exceeding $100 billion. Notably, this definition lacks any technical or philosophical standards. Most experts in the field agree that AGI should possess human-like intelligence and cognitive abilities, enabling it to understand, learn, and apply knowledge across various tasks. This contrasts with the concept of superintelligence, which refers to an intelligence that significantly exceeds human capabilities.

While the wording surrounding AGI in the agreement may seem peculiar to some, it holds strategic importance. The current multiyear contract stipulates that it will terminate upon OpenAI’s attainment of AGI, granting Microsoft no early access to future AI models afterward. Additionally, the tech company would lose its exclusive rights as OpenAI’s cloud provider.

The publication further reports that OpenAI is pursuing a renegotiation of the existing agreement, driven by concerns that the AGI clause could hinder Microsoft’s future investment in the company. To make these changes, OpenAI must first transition to a for-profit entity.

The ongoing negotiations with Microsoft, one of OpenAI’s primary investors, are centered around several key issues. These include Microsoft’s equity stake in the prospective for-profit entity, whether Azure will remain OpenAI’s exclusive cloud provider, the rights to future AI models, and whether Microsoft will continue to receive 20 percent of the revenue generated by ChatGPT.

Microsoft’s $100B Profit Clause Redefines AGI Reality
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