4 ms·

> Lawyers for Microsoft and other investors will be knocking on the boards' door Monday morning and some of these board members who have never had a real job in

> Lawyers for Microsoft and other investors will be knocking on the boards' door Monday morning and some of these board members who have never had a real job in their lives will get steamrolled. Legally, Microsoft clearly knew they were stepping into some whacky corporate structure. If their profits are capped and they have no rights, that's what it is. You think they're just going to complain their way out of it in court? I'm not convinced.

wokwokwok 3y ago
Does it matter? When does controversial corporate stuff not result in some kind of legal action? It doesn’t actually matter what the situation is, or if it makes sense… you just take your pack of lawyers and you point them at the enemy and tell them to do their jobs. I mean, have you met Microsoft? Yeah. They have a lot of lawyers. I think you can take it as a given this will have some kind of response… it’ll just be a matter of them trying to judge the benefits vs. the cost of it. Ie. it is not that they can’t lodge legal action, because, trust me, they can… but they, I guess, will wait and see what Sam does, and try to decide if/who they want to back before they do anything.
- jgalt212 3y ago
  > When does controversial corporate stuff not result in some kind of legal action? Truth. And further leverage depending on how much of the $10B in cash or Azure equivalents MSFT has already delivered.
DebtDeflation 3y ago
You're missing the point. Microsoft doesn't care about the ROI of their investment in OpenAI or who is the CEO. They care about having unfettered access to sell access to GPT4 and subsequent APIs on Azure and they will fight that to the death in court and will win. If the board wants to turn the company into some fantasy AGI foundation and cease work on their LLMs they will be ousted faster than Sam was.
- mattmaroon 3y ago
  Ousted by who? To whom do they answer? I’ve got some experience in not for profit boards and for profit boards. For profit boards serve shareholders. Not for profit boards are often the ultimate authority. There are no shareholders. They may have members who fill that role, or they may not. They can also be essentially self-sustaining, with only board members electing new board members. Unless given some authority by contract Microsoft likely has no ability to do anything with their board.
  - godzillabrennus 3y ago
    Microsoft can hire the most expensive lawyers in the world to steamroll this board by forcing them to spend all of their funding until they are forced to sell assets to cover costs. It’ll be a dark day for these people who thought ousting Sam was a good day when half the company departs for his next go at this anyway.
    - paganel 3y ago
      And that will help MS how, exactly? Also, "hiring the best lawyers in the world" is similar to the "nine women can't give birth to one baby in one month", that is, from a certain point on both sides can "hire the best lawyers in the world", or pretty much close to it, an order of magnitude (or two or three, like MS has over whoever will stand behind the OpenAI's board members in helping them with money) bigger scale doesn't necessarily guarantee the expected outcome.
      - mattmaroon 3y ago
        People have a lot of magical thinking about how the legal system works when they haven’t experienced it first hand. If one company could sue another smaller company out of business at will, there would only be one company. It does happen that companies go bankrupt fighting invalid lawsuits, no doubt, but it’s rare and it’s almost never a company that just built the most talked about product of the decade and raised an 11 digit war chest.
    - 3y ago
lumost 3y ago
Who knows what representations were made. I can’t imagine MSFT pumped 10B into something without protection.
- lucubratory 3y ago
  There is no indication that OpenAI won't honour its commitments to Microsoft, and I think it's incredibly unlikely that said commitments to Microsoft had anything at all about keeping Sam Altman as CEO.
  - jgalt212 3y ago
    Yes, but the vibes have changed dramatically. I would expect some follow on agreements and / or amendments from MSFT.
    - capableweb 3y ago
      Normally, I'd say that probably they hold a lot of power in their agreements. But in this case? Sure, they've been providing hosting and resources, but I'm sure there are at least 5 other companies that could and would provide the same if they had the opportunity, just to be associated with OpenAI.
      - oneoff111 3y ago
        Don’t underestimate the length of time and magnitude of investment from MSFT. They spent years solving the technical problems that arise when trying to train these models. They are currently the only corporation who knows how to host OpenAI-scale training. They are literally building data centers for OpenAI according to OpenAI’s whims. This is not an insurmountable lead but it could take years for others to catch up, or a dramatic change in GPU hardware/transformer architecture. They laid off 10s of thousands to “pay” for all of this (not in terms of dollars necessarily but in terms of messaging and public strategy).
      - onlyrealcuzzo 3y ago
        They get to pretend to have huge cloud usage - a huge chunk Azure comes from OpenAI - which they count as another massive gain in a different division in the company. Their stock is probably up $250B because of this investment... The idea they're getting screwed is interesting. Microsoft is a lot of things - stupid and incompetent are neither of those things. They want to have their cake and eat it, too.

wokwokwok 3y ago

Does it matter? When does controversial corporate stuff not result in some kind of legal action? It doesn’t actually matter what the situation is, or if it makes sense… you just take your pack of lawyers and you point them at the enemy and tell them to do their jobs. I mean, have you met Microsoft? Yeah. They have a lot of lawyers. I think you can take it as a given this will have some kind of response… it’ll just be a matter of them trying to judge the benefits vs. the cost of it. Ie. it is not that they can’t lodge legal action, because, trust me, they can… but they, I guess, will wait and see what Sam does, and try to decide if/who they want to back before they do anything.

jgalt212 3y ago
> When does controversial corporate stuff not result in some kind of legal action? Truth. And further leverage depending on how much of the $10B in cash or Azure equivalents MSFT has already delivered.

DebtDeflation 3y ago

You're missing the point. Microsoft doesn't care about the ROI of their investment in OpenAI or who is the CEO. They care about having unfettered access to sell access to GPT4 and subsequent APIs on Azure and they will fight that to the death in court and will win. If the board wants to turn the company into some fantasy AGI foundation and cease work on their LLMs they will be ousted faster than Sam was.

mattmaroon 3y ago
Ousted by who? To whom do they answer? I’ve got some experience in not for profit boards and for profit boards. For profit boards serve shareholders. Not for profit boards are often the ultimate authority. There are no shareholders. They may have members who fill that role, or they may not. They can also be essentially self-sustaining, with only board members electing new board members. Unless given some authority by contract Microsoft likely has no ability to do anything with their board.
- godzillabrennus 3y ago
  Microsoft can hire the most expensive lawyers in the world to steamroll this board by forcing them to spend all of their funding until they are forced to sell assets to cover costs. It’ll be a dark day for these people who thought ousting Sam was a good day when half the company departs for his next go at this anyway.
  - paganel 3y ago
    And that will help MS how, exactly? Also, "hiring the best lawyers in the world" is similar to the "nine women can't give birth to one baby in one month", that is, from a certain point on both sides can "hire the best lawyers in the world", or pretty much close to it, an order of magnitude (or two or three, like MS has over whoever will stand behind the OpenAI's board members in helping them with money) bigger scale doesn't necessarily guarantee the expected outcome.
    - mattmaroon 3y ago
      People have a lot of magical thinking about how the legal system works when they haven’t experienced it first hand. If one company could sue another smaller company out of business at will, there would only be one company. It does happen that companies go bankrupt fighting invalid lawsuits, no doubt, but it’s rare and it’s almost never a company that just built the most talked about product of the decade and raised an 11 digit war chest.
  - 3y ago

lumost 3y ago

Who knows what representations were made. I can’t imagine MSFT pumped 10B into something without protection.

lucubratory 3y ago
There is no indication that OpenAI won't honour its commitments to Microsoft, and I think it's incredibly unlikely that said commitments to Microsoft had anything at all about keeping Sam Altman as CEO.
- jgalt212 3y ago
  Yes, but the vibes have changed dramatically. I would expect some follow on agreements and / or amendments from MSFT.
  - capableweb 3y ago
    Normally, I'd say that probably they hold a lot of power in their agreements. But in this case? Sure, they've been providing hosting and resources, but I'm sure there are at least 5 other companies that could and would provide the same if they had the opportunity, just to be associated with OpenAI.
    - oneoff111 3y ago
      Don’t underestimate the length of time and magnitude of investment from MSFT. They spent years solving the technical problems that arise when trying to train these models. They are currently the only corporation who knows how to host OpenAI-scale training. They are literally building data centers for OpenAI according to OpenAI’s whims. This is not an insurmountable lead but it could take years for others to catch up, or a dramatic change in GPU hardware/transformer architecture. They laid off 10s of thousands to “pay” for all of this (not in terms of dollars necessarily but in terms of messaging and public strategy).
    - onlyrealcuzzo 3y ago
      They get to pretend to have huge cloud usage - a huge chunk Azure comes from OpenAI - which they count as another massive gain in a different division in the company. Their stock is probably up $250B because of this investment... The idea they're getting screwed is interesting. Microsoft is a lot of things - stupid and incompetent are neither of those things. They want to have their cake and eat it, too.