OpenAI Must Earn $100 Bn to Prove AGI’s Worth to Microsoft

Microsoft and OpenAI have agreed on a new, specific definition of AGI, or artificial general intelligence. 

According to a report, OpenAI can only achieve AGI when it has built a system that can generate $100 billion in profits.

For Microsoft, the definition of AGI is highly important. Due to a clause in the agreement, once OpenAI achieves AGI, Microsoft will not be able to access the most powerful models from the AI startup. 

However, reports also surfaced that OpenAI is trying to remove the clause from the agreement. 

If the new definition of AGI is anything to go by, OpenAI is far from it. This year, OpenAI observed a $5 billion loss, with $3.7 billion in revenue. Reports also suggest that OpenAI will not turn into a profitable entity until 2029.

A clear, objective definition of AGI was long overdue. When OpenAI released its most powerful o3 series of models, speculations arose about whether the model achieved AGI, given its performance on benchmarks. 

The o3 model scored almost 90% on the ARC-AGI benchmark, exceeding human performance. However, the creator of the benchmark, Francois Chollet, on X, stated, “I don’t believe this is AGI—there are still easy ARC-AGI-1 tasks that o3 can’t solve.” 

Sam Altman at the 2024 FinRegLab AI Symposium said, “As we get closer to it [AGI], I think it’s become a less useful term. People use it to mean very different things.” He indicated that for some, it means true superintelligence; some might believe AGI will be smarter than all of humanity put together. Heck, people believed that the o1 model was showing early signs of AGI. 

So for Microsoft, it means money. Of course, Satya Nadella wouldn’t let Sam Altman declare AGI based on a subjective definition. That said, their relationship is facing a few cracks. Microsoft is set to decrease its dependency on OpenAI and plans to add more internal and third-party AI models to Microsoft 365 Copilot. 

This move stems from an attempt to reduce costs and diversify the underlying AI models. The company is also working on integrating its own models into 365 Copilot. 

Moreover, Microsoft might also soon invest in Anthropic, the AI company behind the Claude models, according to Dylan Patel, founder and chief analyst at SemiAnalysis. In a post on X, he predicted that the new funding round would increase the company’s valuation to $59 billion.