Microsoft’s $100B AI Deal Did you know Microsoft and OpenAI’s partnership revolves around a $100 billion milestone? Here’s the breakdown: Microsoft gets 75% of OpenAI’s profits until OpenAI hits $100B. That’s not revenue—profits. For context, only a handful of companies, like Apple and Saudi Aramco, have ever achieved this level of profitability. OpenAI’s mission to advance AGI (Artificial General Intelligence) now has a financial twist, as Microsoft has tied its support to this enormous profit threshold. This deal isn’t just about money—it’s about control. OpenAI needs Microsoft’s resources, from servers to computing power, to scale its innovations. But this dependence comes at a price: OpenAI risks losing flexibility and focus on its original goal of ensuring AGI benefits humanity. Satya Nadella, Microsoft’s CEO, accelerated the terms in 2024, emphasizing financial metrics over traditional definitions of AGI. This raises big questions: Are we prioritizing corporate profits over groundbreaking AI innovation? How does this shape the future of AI for everyone? And what’s next for OpenAI as it balances innovation with profitability? This $100B milestone might sound arbitrary, but it’s a strategic move by Microsoft to maintain long-term leverage over one of the most influential AI companies in the world. It also sets a precedent—AI innovation isn’t just about breakthroughs anymore; it’s about economic power. What do you think about this intersection of business strategy and technology? Let me know in the comments! #product #productmanager #productmanagement #startup #business #openai #llm #ai #microsoft #google #gemini #anthropic #claude #llama #meta #nvidia #career #careeradvice #mentor #mentorship #mentortiktok #mentortok #careertok #job #jobadvice #future #2024 #story #news #dev #coding #code #engineering #engineer #coder #sales #cs #marketing #agent #work #workflow #smart #thinking #strategy #cool #real #jobtips #hack #hacks #tip #tips #tech #techtok #techtiktok #openaidevday #aiupdates #techtrends #voiceAI #developerlife #cursor #replit #pythagora #bolt #agi #lawyer #legal

Microsoft has a hundred billion reasons not to certify Artificial General Intelligence and now so does OpenAI. It turns out that Microsoft and OpenAI have cemented the financial terms for what the OpenAI board will consider as the definition of Artificial General Intelligence. Now, stick with me. The OpenAI board and Microsoft have a partnership relationship where in return for essentially providing them sponsorship as a startup, the OpenAI board will return 75% of the profits of OpenAI to Microsoft until Artificial General Intelligence is achieved. That has always been fuzzy. It has always been a vague definition. People have commented how vague that was and noted this is not like anything Microsoft's lawyers have signed before. Well, Microsoft's lawyers got around to cleaning that up and I think they did so because they saw 03, they saw what's coming in 2025, they knew the conversation would get harder. Satya Nadella, CEO of Microsoft, knew the conversation would get harder. And so he wanted to have it now and clean it up before the new year started. And what he wanted was a clean, clear financial definition. If Artificial General Intelligence means that general intelligence does economically valuable work, you can argue that means it has to generate profits and that means it has to generate a particular number. I think that is the reasoning. It still strikes me as a terrible line of reasoning. Intelligence shouldn't be measured by the profitability of the machine. But that is exactly what OpenAI and Microsoft have agreed to. $100 billion worth. Now, you might be thinking to yourself, how often have companies generated $100 billion or more in profits over the life of the firm? It is extremely rare. It is like 10 companies rare, like a list of few. Saudi Aramco has done it. Berkshire Hathaway has done it. Apple, of course, has done it. Microsoft has done it. Now, Microsoft has only generated $600 or $700 billion over the life of the firm in profits. So if they get another $100 billion out of OpenAI, they've added like an eighth to their total company lifetime profits. It's a huge number. And OpenAI is not positioned to generate that money anytime soon. In fact, they are burning money faster than they can bring it in because they have to build new data centers to train what's next. And so it is quite likely, like 99.99% of companies to have ever existed, that OpenAI will not ever generate $100 billion in profits. And if that is the case, then there is no way really in practice for OpenAI to dissolve the partnership with Microsoft, it looks like. And if that is the case, then Microsoft has earned pole position in one of the key model makers intelligence advances. OpenAI is doing things with O1 and O3 that while they may not have a super strong technical mode, considering how fast rivals like DeepSeek are coming along, it's still breaking ground. It's still innovative. It's still a position you'd rather be in. And Microsoft has the controlling interest in OpenAI at this point. And it's going to stay that way for the foreseeable future. I've seen newspaper accounts that say for the next 10 years, and I look at it and I say, they'd have to do $10 billion in profit a year for the next 10 years to get to $100 billion. They're not close to that. They're losing money hand over fist. Amazon didn't generate $10 billion in profit a year until quite recently. And so if you think about it, this is a very, very long term play from Microsoft. And it means that likely we will have what is functionally general intelligence, maybe even functionally super intelligence. And Microsoft is going to have a nice handy interest because it hasn't generated $100 billion in profit yet. And that may be the greatest work the Microsoft lawyers have ever done. And I think it's an absolutely terrible definition of intelligence. Like that is not the correct definition. What do you think?