5 ms·

Why do people conflate OpenAI with Microsoft? Microsoft has an investment in OpenAI and provides infrastructure for them, but they are separate organizations.

WestCoastJustin 4y ago
They do own 49% [1]. So, sure they are separate organizations. But, when someone owns 49% of your house they have some sway in the decision making that happens. When you look at this from a integrations standpoint, where MS is going to have this baked into all their products, you can expand this logic way more. They are for sure influencing roadmap in areas they are interested in. [1] https://www.theverge.com/2023/1/23/23567448/microsoft-openai-partnership-extension-ai https://www.theverge.com/2023/1/23/23567448/microsoft-openai...
- ddol 4y ago
  Not entirely accurate. They don’t own 49% yet [0]. Microsoft invested $10B, and get 75% of OpenAI’s profits until they receive $10B and _then_ they get their 49% stock certificate. [0] https://www.semafor.com/article/01/09/2023/microsoft-eyes-10-billion-bet-on-chatgpt https://www.semafor.com/article/01/09/2023/microsoft-eyes-10...
  - stuckkeys 4y ago
    Checks out. Thank you for your work. Surprised Sam agreed to 49% after pay back. That is crazy amount of equity to give out. I mean it makes sense, especially since MS is providing the infrastructure. It will allow them to scale.
    - gremlinsinc 4y ago
      yeah, i thought it was a good deal - it is, if it's JUST one or the other, or even 75% + like maybe 5% stock?
  - WestCoastJustin 4y ago
    Didn't know that. Thank you. That's like a Mr. Wonderful deal structure.
  - deanCommie 4y ago
    Sounds like a good excuse to never make any profits, and keep reinvesting all revenue into more R&D?
JohnFen 4y ago
Microsoft is the majority shareholder. That they're legally distinct organizations isn't as meaningful as it would be if Microsoft didn't effectively own OpenAI.
- SllX 4y ago
  They might be the largest but at 49% they aren’t a majority shareholder; that requires >50%.
  - JohnFen 4y ago
    True, I misspoke with that word. I think the rest of my comment holds nonetheless.
    - astrange 4y ago
      Microsoft doesn't own any of OpenAI LP. They will in the future. (And OpenAI itself is a nonprofit it will never own.)
superkuh 4y ago
Look at it this way, if I repeatedly deposit $9999 into my bank account to avoid regulatory oversight for depositing $10000 then I'm still breaking the law by trying to avoid the regulatory trigger. This is called "structuring" and it is a criminal act. But if I do this in a stock context and buy 49% control of multiple companies over and over, with all the same obviousness of my intentional avoidance of the regulatory trigger, it's considered a smart move and pretty much the status quo. Yes, the practice of law says Microsoft does not own openai. But it's also obvious what's going on when companies do this.
ftxbro 4y ago
Some of these replies are quibbling about percents of investment, but the elephant in the room is that the government and military and intelligence agencies have almost surely become involved by this point, and they must be providing some amounts of dark investment somehow at minimum. At maximum it's a new Manhattan-scale project. You can go down the rabbit hole if you want, but if you want only the most superficial glimpse of it then consider that OpenAI board member Will Hurd was a CIA undercover agent and also a representative in the House Permanent Select Committee on Intelligence and also he is a trustee of In-Q-Tel which is the private investment arm of the CIA.
- crabkin 4y ago
  Also, consider the situation in which another state is putting significant resources into a similar project. Would it not follow that it is in the best interest of the U.S. to then fund and support OpenAI? The strategic calculus becomes almost trivial if we presume that "AI" really is going to be as transformative and "possible" as we imagine it being. It's why the Manhattan Project analogy works so well.
- beebmam 4y ago
  It's funny that you think the US military (or any military for that matter) is anywhere as competent as a modern tech company (which ALSO have their own incompetence problems). Buddy, these guys are so far behind the times, they're constantly playing catch-up from 10-20 years ago.
  - walterbell 4y ago
    People with corporate experience can advise governments. Eric Schmidt, former Google CEO, led a multi-year project to develop a national AI strategy, https://www.nscai.gov/ https://www.nscai.gov/ > The Final Report presents the NSCAI’s strategy for winning the artificial intelligence era. The 16 chapters explain the steps the United States must take to responsibly use AI for national security and defense, defend against AI threats, and promote AI innovation. The accompanying Blueprints for Action provide detailed plans for the U.S. Government to implement the recommendations.
  - 4y ago

WestCoastJustin 4y ago

They do own 49% [1]. So, sure they are separate organizations. But, when someone owns 49% of your house they have some sway in the decision making that happens. When you look at this from a integrations standpoint, where MS is going to have this baked into all their products, you can expand this logic way more. They are for sure influencing roadmap in areas they are interested in. [1] https://www.theverge.com/2023/1/23/23567448/microsoft-openai-partnership-extension-ai https://www.theverge.com/2023/1/23/23567448/microsoft-openai...

ddol 4y ago
Not entirely accurate. They don’t own 49% yet [0]. Microsoft invested $10B, and get 75% of OpenAI’s profits until they receive $10B and _then_ they get their 49% stock certificate. [0] https://www.semafor.com/article/01/09/2023/microsoft-eyes-10-billion-bet-on-chatgpt https://www.semafor.com/article/01/09/2023/microsoft-eyes-10...
- stuckkeys 4y ago
  Checks out. Thank you for your work. Surprised Sam agreed to 49% after pay back. That is crazy amount of equity to give out. I mean it makes sense, especially since MS is providing the infrastructure. It will allow them to scale.
  - gremlinsinc 4y ago
    yeah, i thought it was a good deal - it is, if it's JUST one or the other, or even 75% + like maybe 5% stock?
- WestCoastJustin 4y ago
  Didn't know that. Thank you. That's like a Mr. Wonderful deal structure.
- deanCommie 4y ago
  Sounds like a good excuse to never make any profits, and keep reinvesting all revenue into more R&D?

JohnFen 4y ago

Microsoft is the majority shareholder. That they're legally distinct organizations isn't as meaningful as it would be if Microsoft didn't effectively own OpenAI.

SllX 4y ago
They might be the largest but at 49% they aren’t a majority shareholder; that requires >50%.
- JohnFen 4y ago
  True, I misspoke with that word. I think the rest of my comment holds nonetheless.
  - astrange 4y ago
    Microsoft doesn't own any of OpenAI LP. They will in the future. (And OpenAI itself is a nonprofit it will never own.)

superkuh 4y ago

Look at it this way, if I repeatedly deposit $9999 into my bank account to avoid regulatory oversight for depositing $10000 then I'm still breaking the law by trying to avoid the regulatory trigger. This is called "structuring" and it is a criminal act. But if I do this in a stock context and buy 49% control of multiple companies over and over, with all the same obviousness of my intentional avoidance of the regulatory trigger, it's considered a smart move and pretty much the status quo. Yes, the practice of law says Microsoft does not own openai. But it's also obvious what's going on when companies do this.

ftxbro 4y ago

Some of these replies are quibbling about percents of investment, but the elephant in the room is that the government and military and intelligence agencies have almost surely become involved by this point, and they must be providing some amounts of dark investment somehow at minimum. At maximum it's a new Manhattan-scale project. You can go down the rabbit hole if you want, but if you want only the most superficial glimpse of it then consider that OpenAI board member Will Hurd was a CIA undercover agent and also a representative in the House Permanent Select Committee on Intelligence and also he is a trustee of In-Q-Tel which is the private investment arm of the CIA.

crabkin 4y ago
Also, consider the situation in which another state is putting significant resources into a similar project. Would it not follow that it is in the best interest of the U.S. to then fund and support OpenAI? The strategic calculus becomes almost trivial if we presume that "AI" really is going to be as transformative and "possible" as we imagine it being. It's why the Manhattan Project analogy works so well.
beebmam 4y ago
It's funny that you think the US military (or any military for that matter) is anywhere as competent as a modern tech company (which ALSO have their own incompetence problems). Buddy, these guys are so far behind the times, they're constantly playing catch-up from 10-20 years ago.
- walterbell 4y ago
  People with corporate experience can advise governments. Eric Schmidt, former Google CEO, led a multi-year project to develop a national AI strategy, https://www.nscai.gov/ https://www.nscai.gov/ > The Final Report presents the NSCAI’s strategy for winning the artificial intelligence era. The 16 chapters explain the steps the United States must take to responsibly use AI for national security and defense, defend against AI threats, and promote AI innovation. The accompanying Blueprints for Action provide detailed plans for the U.S. Government to implement the recommendations.
- 4y ago