when

Elon Musk

OpenAI is <a href="https://www.reuters.com/technology/openai-seeks-unlock-investment-by-ditching-agi-clause-with-microsoft-ft-reports-2024-12-06/" rel="nofollow noopener" target="_blank">reportedly</a> in discussions to amend a contractual clause with Microsoft that currently restricts the tech giant’s access to the AI firm’s most advanced models upon the achievement of artificial general intelligence (AGI).&nbsp; 
People familiar with the matter say the contractual maneuver is to help the AI startup unlock more investment opportunities from Microsoft. OpenAI has notably not set any timeline for the development of AGI. 
<h3 id="span-style-font-weight-400-reevaluating-the-agi-clause-span">Reevaluating the AGI clause</h3> 
It is no secret that OpenAI has been pursuing the AGI milestone, an ambitious level in AI technology. AGI is described as an autonomous system that can outperform humans at economically valuable tasks.&nbsp; 
Under the current contractual agreement, Microsoft’s access would be voided to the advanced AGI model when it’s developed. The clause that prevents Microsoft from accessing OpenAI’s AGI was initially included to prevent the commercial misuse of the model. 
According to its <a href="https://www.sec.gov/ix?doc=/Archives/edgar/data/0000789019/000095017024118967/msft-20240930.htm" rel="nofollow noopener" target="_blank">quarterly filings</a>, Microsoft has invested about $13 billion in the startup. It also contributed another $750 million in a recent raise, which pushed OpenAI’s valuation to over $150 billion. However, there are concerns that if Microsoft is unable to access AGI, it may reduce or even stop investing.&nbsp; 
OpenAI is considering removing the provision to allow Microsoft access to AGI once it is available.&nbsp; 
The timeline for AGI remains vague. However, the Sam Altman-led firm no longer defines AGI as a single point. Instead, it considers AGI to be a continuous process. Altman mentioned, “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.”&nbsp; 
<h3 id="span-style-font-weight-400-investment-implications-of-openai-s-shift-from-non-profit-status-span">Investment implications of OpenAI’s shift from non-profit status</h3> 
OpenAI started accepting external funding in 2019 to cover costs for developing AI, with Microsoft leading the way with $1 billion. In exchange, Microsoft got licenses to some of the startup’s pre-AGI technologies.&nbsp; 
Then, OpenAI made the strategic decision to go from being a non-profit research lab to a for-profit organization. This transition was intended to attract the sizeable capital it would need to develop its products.&nbsp; 
Altman acknowledged that the organization’s initial structure did not anticipate the vast resources needed for product development, saying “When we started, we had no idea we were going to be a product company or that the capital we needed would turn out to be so huge, if we knew those things, we would have picked a different structure.” 
OpenAI’s transition to a for-profit model has drawn a lot of criticism, including from Elon Musk, one of the project’s early backers. Elon Musk has since moved on to establish a competing AI startup, xAI. Musk filed a lawsuit against OpenAI and Microsoft, accusing them of deviating from the AI startup’s original mission. He accused Altman, who stands to receive a direct equity stake in the startup, of “deceit of Shakespearean proportions.” 
The AI industry is resource-intensive, and OpenAI’s contemplation of removing the AGI clause from its agreement with Microsoft could be a pivotal moment in the technology’s evolution. However, questions will remain about how it balances the need for investment with ethical principles.&nbsp; 
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OpenAI re-evaluating AGI clauses and for-profit blueprint in strategic investment push

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