I learned about “The Clause” from Microsoft CEO Satya Nadella. During an interview in May 2023, I asked about Microsoft’s deal with OpenAI, which capped their profits from AI tech. Nadella’s response was puzzling. He mentioned superintelligence as a game-changer, hinting that if it happens, all bets are off. His tone was oddly casual for a topic that could redefine humanity’s future.
The real kicker is this: if OpenAI’s models achieve artificial general intelligence (AGI), Microsoft loses access to new models. This clause, which was supposed to last until 2030, becomes void if AGI is realized. Although initially overlooked, this clause is now causing tension between Microsoft and OpenAI, grabbing headlines across major outlets.
The significance of The Clause extends beyond Microsoft and OpenAI. It touches on a bigger debate about AGI’s potential impact and profitability. If AGI becomes a reality, controlling it could make past tech monopolies look trivial. Understanding AI’s current landscape requires knowing The Clause’s implications.
Here’s the deal: OpenAI can deny its tech to Microsoft if its board decides its models have reached AGI, defined as outperforming humans in most valuable work. This vague definition makes Microsoft uneasy, fearing premature declarations. Their only recourse would be legal action.
OpenAI must also prove its models can generate profits over $100 billion. Microsoft has to agree the standard is met, but can’t unreasonably object. Again, legal disputes could decide this.
Altman, OpenAI’s CEO, admitted these standards are vague, offering their board significant control over the decision. If OpenAI claims it’s achieved sufficient AGI, Microsoft is stuck with outdated models and loses cloud service rights. They can’t develop AGI independently, either.
Microsoft agreed to this because they didn’t believe AGI was near. They played along, thinking it was a long shot, but with AGI speculated to be around the corner, this gamble might backfire. Meanwhile, other companies are throwing money at AI talent like it’s a gold rush, eager to hit the AGI jackpot.
Now, Microsoft might have an out. OpenAI wants to restructure, allowing it to grow profitably. This requires Microsoft’s approval, giving them leverage to renegotiate The Clause. Reports suggest Microsoft might want it gone entirely.
OpenAI’s shift from preventing tech giants from monopolizing AI to becoming a commercial entity itself reflects changing priorities. With a $300 billion valuation, they’re now eyeing profits under the guise of public benefit.
Losing The Clause would be unfortunate. It’s a benchmark for AGI’s potential to disrupt our world. Its demise would silence a warning bell in the AI industry.
