Is the Microsoft-OpenAI 'Bromance' Beginning to Fray? (seattletimes.com) 30
Though Sam Altman once called OpenAI's partnership with Microsoft "the best bromance in tech," now "ties between the companies have started to fray" reports the New York Times — citing interviews with 19 people "familiar with the relationship". [Alternate URL here.]
Among other things, Satya Nadella "has said privately that Altman's firing in November shocked and concerned him, according to five people with knowledge of his comments. Since then, Microsoft has started to hedge its bet on OpenAI," and reconsidered new investments beyond its initial $13 billion — even as OpenAI expects to lose $5 billion this year That tension demonstrates a key challenge for AI startups: They are dependent on the world's tech giants for money and computing power because those big companies control the massive cloud computing systems the small outfits need to develop AI... Over the past year, OpenAI has been trying to renegotiate the deal to help it secure more computing power and reduce crushing expenses while Microsoft executives have grown concerned that their AI work is too dependent on OpenAI... [I]n March, Microsoft paid at least $650 million to hire most of the staff from Inflection, an OpenAI competitor...
In June, Microsoft agreed to an exception in [OpenAI's] contract, six people with knowledge of the change said. That allowed OpenAI to sign a roughly $10 billion computing deal with Oracle for additional computing resources, according to two people familiar with the deal. Oracle is providing computers packed with chips suited to building AI, while Microsoft provides the software that drives the hardware... While it was looking for computer power alternatives, OpenAI also raced to broaden its investors, according to two people familiar with the company's plan. Part of the plan was to secure strategic investments from organizations that could bolster OpenAI's prospects in ways beyond throwing around money. Those organizations included Apple, chipmaker Nvidia, and MGX, a tech investment firm controlled by the United Arab Emirates... Earlier this month, OpenAI closed a $6.6 billion funding round led by Thrive Capital, with additional participation from Nvidia, MGX and others. Apple did not invest, but Microsoft also participated in the funding round.
OpenAI expected to spend at least $5.4 billion in computing costs through the end of 2024, according to documents reviewed by The New York Times. That amount was expected to skyrocket over the next five years as OpenAI expanded, soaring to an estimated $37.5 billion in annual computing costs by 2029, the documents showed... Still, OpenAI employees complain that Microsoft is not providing enough computing power, according to three people familiar with the relationship. And some have complained that if another company beat it to the creation of AI that matches the human brain, Microsoft will be to blame because it hasn't given OpenAI the computing power it needs, according to two people familiar with the complaints.
Oddly, that could be the key to getting out from under its contract with Microsoft. The contract contains a clause that says that if OpenAI builds artificial general intelligence, or AGI — roughly speaking, a machine that matches the power of the human brain — Microsoft loses access to OpenAI's technologies.
Among other things, Satya Nadella "has said privately that Altman's firing in November shocked and concerned him, according to five people with knowledge of his comments. Since then, Microsoft has started to hedge its bet on OpenAI," and reconsidered new investments beyond its initial $13 billion — even as OpenAI expects to lose $5 billion this year That tension demonstrates a key challenge for AI startups: They are dependent on the world's tech giants for money and computing power because those big companies control the massive cloud computing systems the small outfits need to develop AI... Over the past year, OpenAI has been trying to renegotiate the deal to help it secure more computing power and reduce crushing expenses while Microsoft executives have grown concerned that their AI work is too dependent on OpenAI... [I]n March, Microsoft paid at least $650 million to hire most of the staff from Inflection, an OpenAI competitor...
In June, Microsoft agreed to an exception in [OpenAI's] contract, six people with knowledge of the change said. That allowed OpenAI to sign a roughly $10 billion computing deal with Oracle for additional computing resources, according to two people familiar with the deal. Oracle is providing computers packed with chips suited to building AI, while Microsoft provides the software that drives the hardware... While it was looking for computer power alternatives, OpenAI also raced to broaden its investors, according to two people familiar with the company's plan. Part of the plan was to secure strategic investments from organizations that could bolster OpenAI's prospects in ways beyond throwing around money. Those organizations included Apple, chipmaker Nvidia, and MGX, a tech investment firm controlled by the United Arab Emirates... Earlier this month, OpenAI closed a $6.6 billion funding round led by Thrive Capital, with additional participation from Nvidia, MGX and others. Apple did not invest, but Microsoft also participated in the funding round.
OpenAI expected to spend at least $5.4 billion in computing costs through the end of 2024, according to documents reviewed by The New York Times. That amount was expected to skyrocket over the next five years as OpenAI expanded, soaring to an estimated $37.5 billion in annual computing costs by 2029, the documents showed... Still, OpenAI employees complain that Microsoft is not providing enough computing power, according to three people familiar with the relationship. And some have complained that if another company beat it to the creation of AI that matches the human brain, Microsoft will be to blame because it hasn't given OpenAI the computing power it needs, according to two people familiar with the complaints.
Oddly, that could be the key to getting out from under its contract with Microsoft. The contract contains a clause that says that if OpenAI builds artificial general intelligence, or AGI — roughly speaking, a machine that matches the power of the human brain — Microsoft loses access to OpenAI's technologies.
optimism (Score:3)
nd some have complained that if another company beat it to the creation of AI that matches the human brain, Microsoft will be to blame because it hasn't given OpenAI the computing power it needs, according to two people familiar with the complaints.
I guess they have some new algorithms we don't know about.
Re: (Score:2)
Or, they are pre-emptively playing the blame game, afraid someone else might have a breakthrough when they seem to be coming up short, and having an excuse on hand. Particularly as they demand investors foot the bill for this enormous expense they may find themselves in need of a scapegoat if things take an unanticipated turn.
Announcing you are ramping up to an annual $37B tech expenditure when you just reported four billion in revenue at the peak of your hype cycle is certainly a bold move.
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You've really got to understand that Sam Altman is an AI true believer. He thought, before he got shit tons of money for generating comprehensible bullshit text spam, that OpenAI was a way to create "the singularity". Who knows exactly how billions of dollars changes his perspective.
But he clearly thought he was still going to achieve that vague, untenable goal before his next renegotiation with Microsoft. And MS's lawyers exploited that to write one of the most one-sided business contracts since the inv
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Altman is a true believer in getting Gates/Elon/Jensen level rich. He thought he could somehow swing leadership of a non profit for that purpose.
That the non profit in question was in AI specifically was likely irrelevant, it just needed the potential to become massive. Look at how he hedged his bets with crypto.
Re:Backwards contract? (Score:4, Interesting)
I thought I'd show what I meant by googling for things sam altman said before 2018, and my assessment of what I found is that you're more right than me.
Re: (Score:2)
I thought I'd show what I meant by googling for things sam altman said before 2018, and my assessment of what I found is that you're more right than me.
I think it's the investment money that turned him into the AI Prophet. At least that's the read I've gotten from watching from a distance. At some point, when you have that much money pouring into your baby, some folks just slip a cog and begin to believe their own hype. If Sam Altman hasn't actually fallen under his own spell, he's doing a damned fine impression of it publicly.
That suits Microsoft perfectly (Score:2)
The contract contains a clause that says that if OpenAI builds artificial general intelligence, or AGI â" roughly speaking, a machine that matches the power of the human brain â" Microsoft loses access to OpenAI's technologies
In other words, Microsoft signed a contract in which they clearly stipulated that they're only interested in the mediocre part of AI.
And why not after all... Mediocre has worked for Microsoft for half a century.
Re:That suits Microsoft perfectly (Score:5, Insightful)
The contract contains a clause that says that if OpenAI builds artificial general intelligence, or AGI â" roughly speaking, a machine that matches the power of the human brain â" Microsoft loses access to OpenAI's technologies
In other words, Microsoft signed a contract in which they clearly stipulated that they're only interested in the mediocre part of AI.
And why not after all... Mediocre has worked for Microsoft for half a century.
Looked at another way, Microsoft is only interested in the software from OpenAI that has a commercial application and makes them money, and they have enough people in the legal department conferring with the technical folks to know that OpenAI will never create AGI with the techniques they are using. They traded off something they know will never be a concern for the thing that benefits them in the immediate and near future, not a bad deal to my mind.
If anyone is the dummy in this exchange, it is Altman and OpenAI who seem to believe they are going to usher in some great techno-future with their silliness. I don't know what they put in the water in the tech centers, but it seems to lead people who I have to assume are normally rational into incredible delusions of grandeur.
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In particular, M$ wants to crush Google. Google is the only reason M$ lost its total dominance over the Web and anything that might have come along later, like say the iPhone, and any competitor, say Android, that M$ could have snapped up easy.
It'd be interesting to ponder if the advertising industry would have evolved differently had M$ kept its Web dominance. Would user tracking be so prevalent now?
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My personal guess is that AGI is a whole other ball game.
It is. At this time, nobody knows whether AGI is even possible. And nobody has any approaches that have a credible chance of working. And no, LLMs will not be part of AGI. LLMs are exceptionally primitive and cannot even do very basic fact-checking.
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LLMs remain self-training expert systems. Interesting. Not associated with intelligence. Very high error rate.
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Only if your expert is Timothy Leary.
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LLMs are neither "self-training" nor "expert systems".
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They are self-training inasmuch as you dump a corpus of data on it and it organizes responses automatically. They are just like expert systems inasmuch as you ask questions and they respond with their canned answer.
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The first is called "unsupervised learning". The second is called "chatbot". Seriously. Stop claiming things that are not there.
So that is why the bullshit claims on AGI (Score:2)
These are threats to Microsoft! But I guess even Microsoft, "incompetence central" as it is, knows that AGI is not possible anytime soon.
Bah we are not near the end of the grift yet (Score:2)
the key challenge for AI startups? (Score:2)
The key challenge for AI startups is getting out of town before the locals figure out they've been scammed bigtime. Sooner or later, even the top corporate execs will run out of enough cocaine to believe in this fever dream, or possibly just break down laughing in the boardroom.
The AGI clause is hilarious, though. Is there also an escape clause in case ponies are found grazing in the Mare Tranquillitatis? Has Trump promised that the Mexicans will build AGI for us at their expense?
AGI doom (Score:2)
Clipartageddon (Score:1)
The world's smallest violin. (Score:2)
Microsoft thought OpenAI would be a good tool to use to make a heavy profit exploiting users. Meanwhile OpenAI thought Microsoft would be a good tool to use to make a heavy profit pushing a dependency on AI. Now Microsoft is concerned they are too dependent on OpenAI and that they not being treated fairly? That's fucking rich considering that is Microsoft's entire business model.
I hope Microsoft goes to war with OpenAI and they destroy each other because it would make the world a better place.
LOL.... (Score:2)
"The contract contains a clause that says that if OpenAI builds artificial general intelligence, or AGI — roughly speaking, a machine that matches the power of the human brain — Microsoft loses access to OpenAI's technologies."
Can't believe Microsoft agreed to this? We all know this is the real goal of the people behind this project.... This amounts to Microsoft either feeling confident they're trying to accomplish an impossible task (that they're funding to the tune of tens of millions of do
Re:LOL.... (Score:4, Interesting)
Or Microsoft is just pretty sure that convincing a judge you've invented AGI is going to be pretty hard to do.
Maybe... (Score:2)
"Bromance" (Score:2)