Microsoft, OpenAI in Talks to Change Partnership

Key Takeaways

This is an age-old relationship. It was the what bore really chatt to the fold was the financial backing of open AI. But the deal was always that they would have limited access to tech if open AAI did reach AGI. How is this going to change Matt? >> That's right. So Microsoft as a condition of all the investment they poured into uh OpenAI, they have access to their technology. They can bake it into their products. They're worried um for some time about a potential cliff. you know, should OpenAI say, "Hey, we've, you know, built an artificially general intelligent system," Microsoft would lose access to the tech. Um, so what we're hearing recently is that Microsoft is getting more comfortable that the talk terms they're talking about now mean that cliff might not occur. There might be a way that they can continue to have access to some of Open AAI's technology, you know, should they hit that milestone. Matt, we've heard that that talks are progressing, that they're positive, but they're still ongoing. We heard from sources that in some valley Sam Alman actually met with Satia Nadella to talk about the issue. The part of it that that is on the open AI side of this is that they want to change that corporate structure. What do we know about how these negotiations are moving toward that? >> Well, so we know that first of all, Microsoft is is the biggest hold out to that renegotiation of OpenAI structure. Um, we know that OpenAI wants to to alter its its corporate charter. They want more flexibility. They want the ability to raise a whole lot more money. And that's really what's kind of ticking the clock here. Um, particularly a bunch of cash from SoftBank. um you know the big investor has the authority to dial down some of that investment if OpenAI doesn't complete the restructure before at the end of the year. So it's just created this little bit of ticking clock in the background um putting pressure on both sides to come up with a deal >> and also revenue share right Matt it feels as though OpenAI is realizing well how much value they're adding and wants a little bit more of it. >> That's right. I mean, if you wind back the clock to 2019 when Microsoft P first put cash into Open AI, um Microsoft got a really good deal um on kind of a flyer at this AI lab was going to be a big deal. Roll the clock forward. Turns out they're an enormous deal. And OpenAI wants a bit more of that pie for sure.