According to reports citing informed sources, American tech giant Microsoft (MSFT.US) is in deep discussions to sign an agreement that could allow it to continue accessing AI technology crucial to OpenAI, thereby removing a significant obstacle for the artificial intelligence startup's transformation into a for-profit entity.
Informed sources revealed that Microsoft and OpenAI are engaged in extensive negotiations to renegotiate their collaboration agreement, which could ensure that Microsoft retains access to OpenAI's key AI technology even after OpenAI achieves its goal of artificial general intelligence (AGI). Under the existing contract, reaching AGI is considered a critical milestone, at which point Microsoft would lose some rights to OpenAI's AI technology. The new agreement aims to eliminate this limitation, which is one of the main obstacles OpenAI faces in its transition to a for-profit company.
Reports indicate that the two parties have discussed new terms, allowing Microsoft to continue using OpenAI's latest AI models and other important AI technologies, even if OpenAI believes it has achieved its goal of building &#34;artificial general intelligence&#34; (AGI).
AGI refers to the hypothetical intelligence of artificial machines that have the capability to understand or learn any intellectual task that a human can perform. Microsoft and OpenAI did not immediately respond to media requests for comments.
According to the current agreement, once OpenAI achieves AGI, it is considered a significant milestone, at which point Microsoft would lose some rights to use OpenAI's technology. However, under the new terms being discussed, even if the AI startup believes it has achieved the goal of building more powerful artificial intelligence (i.e., AGI), Microsoft would still be able to use OpenAI's latest models and other related core AI technologies.
Negotiation representatives have been meeting regularly, and an agreement could be reached within weeks. Earlier this month, Microsoft CEO Satya Nadella and OpenAI CEO Sam Altman discussed restructuring matters at the Allen &amp; Co. conference in Sun Valley, Idaho.
However, the agreement has not yet been finalized and may still encounter new obstacles.
The collaboration between the two companies has ushered in the era of artificial intelligence. Microsoft built a super AI server cluster for OpenAI to develop the large language model behind ChatGPT. In exchange, Microsoft gained the rights to integrate OpenAI's leading global core AI technology into its software products.
Discussions about OpenAI becoming a for-profit company have been ongoing for months. According to previous reports, Microsoft, which invested approximately $13.75 billion and holds rights to use the company's intellectual property, is the largest &#34;equity holder&#34; among OpenAI's investors. The core issue lies in Microsoft's ownership stake in the potential new structured company.
Since then, the scope of negotiations has expanded, evolving into a renegotiation of the relationship between the two parties; Microsoft aims to avoid suddenly losing access to OpenAI's core AI technology before the current agreement expires in 2030
According to media reports, OpenAI hopes to secure a larger share of the revenue split with Microsoft and seeks to adjust Microsoft's access to its intellectual property; meanwhile, Microsoft wishes to continue using OpenAI's core AI technology after the existing contract expires in 2030.
Reports indicate that OpenAI also has its own concerns: the company wants to ensure that regardless of how much revenue and equity Microsoft gains, its nonprofit entity can obtain sufficient resources and hold significant equity in OpenAI.
The startup also hopes that even if Microsoft has the right to use the same AI technology, OpenAI can offer different products based on its models to customers. OpenAI plans to expand its services to more clients, including government clients that do not exclusively use Microsoft's Azure cloud computing platform.
Additionally, OpenAI wants to ensure that Microsoft adheres to strict safety standards when deploying its technology, especially as it approaches AGI.
OpenAI publicly defines AGI as &#34;a highly autonomous system that surpasses human capabilities in most economically valuable work.&#34; The current contract includes clauses related to AGI technology milestones, which can be triggered by technological or commercial achievements, according to sources cited by the media.
The OpenAI board has the authority to decide when the company reaches AGI on a technical level. In this scenario, Microsoft would lose the right to use the technology developed by OpenAI after achieving AGI.
Commercial milestones are triggered when OpenAI generates approximately $100 billion in total profits for investors, including Microsoft—at which point the company would be able to repay Microsoft the returns due under the existing agreement. In this case, Microsoft would lose the right to use all of OpenAI's technology (including AI application products developed before the trigger point).
Reports indicate that Microsoft has the right to determine whether commercial milestones have been achieved, but if there is a disagreement between the two parties regarding this determination, it could ultimately lead to litigation. Additionally, another clause in the current contract restricts Microsoft from developing AGI technology on its own.
Reports state that Microsoft previously agreed to relinquish some intellectual property rights related to the acquisition of the company io, co-founded by iPhone core designer Jony Ive, for $6.5 billion.
However, Microsoft did not express support for OpenAI's proposed acquisition of the AI coding startup Windsurf. The deal ultimately fell through, partly due to the tense relationship with Microsoft.
Windsurf sold AI programming tools that competed with Microsoft products and did not want Microsoft to acquire its intellectual property; OpenAI attempted to get Microsoft to accept the relevant terms but ultimately failed. Subsequently, Windsurf's co-founders and a few employees joined Google's parent company Alphabet for a deal price of $2.4 billion.
The two parties are also negotiating Microsoft's stake in OpenAI after the restructuring, discussing a range of equity around 30%, according to media reports. The Financial Times had previously reported on discussions regarding core equity ratios. However, if Microsoft believes that the equity and other contractual changes are still insufficient to meet its needs, the company is willing to terminate negotiations and maintain the existing contract terms
OpenAI is eager to change its complex nonprofit structure, partly to secure additional funding to continue building data centers that provide robust AI computing infrastructure support for its next-generation AI large models. SoftBank Group Corp. has stated that it will provide OpenAI with tens of billions of dollars in support, but if OpenAI's restructuring is not completed by the end of the year, the company may choose to reduce this expenditure

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Microsoft and OpenAI are in deep discussions about a new agreement aimed at ensuring that Microsoft can continue to use its key AI technologies after OpenAI achieves Artificial General Intelligence (AGI). This agreement will eliminate the restrictions in the existing contract regarding Microsoft's loss of certain technology usage rights after AGI is reached. The new terms allow Microsoft to continue using OpenAI's latest models and other technologies, even if OpenAI believes it has achieved its AGI goals

- Microsoft is in advanced discussions to sign an agreement that would secure ongoing access to critical AI technology from OpenAI, addressing a major obstacle in OpenAI's transition to a for-profit entity.  
- The new terms being negotiated would allow Microsoft to continue using OpenAI's latest AI models even after OpenAI potentially achieves its goal of artificial general intelligence (AGI).  
- Ongoing negotiations aim to redefine the partnership, with both companies seeking to ensure their respective interests are protected as they navigate the complexities of their collaboration.

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$13.7 billion for a "permanent AI pass"? Microsoft and OpenAI discuss rewriting AGI trigger clauses