4 ms·

How are they leveraging them? My understanding is Microsoft has no power over the board.

by abi 3y ago

paulddraper 3y ago
OpenAI needs the Microsoft partnership
gizmo 3y ago
They who control the gpus control the universe. There is a great chip shortage. If MS breaks the lease agreement with OpenAI (based on some pretext about governance) OpenAI won't be able to do any work nor will they be able to serve customer requests for the next year while they litigate this in court. Microsoft holds all the cards because they own the data centers.
- Davidzheng 3y ago
  If that's true why did they even fund openai. Why not just beat them at making LLMs
  - wil421 3y ago
    When there’s a gold rush don’t be the one mining gold be the one selling shovels.
- anonymouskimmer 3y ago
  > If MS breaks the lease agreement with OpenAI The first thing OpenAI would ask a court for is a preliminary injunction to maintain the status quo while all of this works out in court. IANAL.
  - rvba 3y ago
    The MS servers somehow can become buggy and work 10 000 times slower due to errors and bugs after a failed patch that takes months to find and fix
    - anonymouskimmer 3y ago
      That's asking for a contempt of court charge and jail time for Satya Nadella (though more likely just multi million dollar daily fines for MS).
- bloomark 3y ago
  > If MS breaks the lease agreement with OpenAI If that happens. AMZN, or GOOG will be all over that.
Terretta 3y ago
As a for instance, and I don't know, but it's plausible Microsoft has full license to use all tech, is the cloud operating it, and has escape clauses tied to "key persons". That combination could mean firing the CEO results in Microsoft getting to have everything and OpenAI being some code and models without a cloud, and whatever people that wouldn't cross the street with Altman. I do not know about OpenAI's deal with Microsoft. But I have been on both sides of deals written that way, where I've been the provider's key person and the contract offered code escrow, and I've been a buyer that tied the contract to a set of key persons and had full source code rights, surviving any agreement. You do this if you think the tech could be existential to you, and you pay a lot for it because effectively you're pre-buying the assets after some future implosion. OTOH, it tends to be not well understood by most people involved in the hundreds of pages of paperwork across a dozen or more interlocking agreements. . . . EDIT TO ADD: This speculating article seems to agree with my speculation, daddy has the cloud car keys, and key person ouster could be a breach: Only a fraction of Microsoft’s $10 billion investment in OpenAI has been wired to the startup, while a significant portion of the funding, divided into tranches, is in the form of cloud compute purchases instead of cash, according to people familiar with their agreement. That gives the software giant significant leverage as it sorts through the fallout from the ouster of OpenAI CEO Sam Altman. The firm’s board said on Friday that it had lost confidence in his ability to lead, without giving additional details. One person familiar with the matter said Microsoft CEO Satya Nadella believes OpenAI’s directors mishandled Altman’s firing and the action has destabilized a key partner for the company. It’s unclear if OpenAI, which has been racking up expenses as it goes on a hiring spree and pours resources into technological developments, violated its contract with Microsoft by suddenly ousting Altman. https://www.semafor.com/article/11/18/2023/openai-has-received-just-a-fraction-of-microsofts-10-billion-investment https://www.semafor.com/article/11/18/2023/openai-has-receiv...
junofan 3y ago
Surely Microsoft can terminate their Azure access? Why piss off your largest supplier?
icelancer 3y ago
Contracts are only worth their language if parties are willing to fight for them. Taking on Microsoft and hoards of angry billionaires with a piece of paper separating you from them might be more of a war than they expected.
- kelsey9876543 3y ago
  Contracts were made to be broken. Its always about who is more powerful, the law was designed for the wealthy to win every time.
dougmwne 3y ago
Riddle me this: what is an AI research lab without access to exascale compute? Who’s cloud infrastructure do they depend on fully right now?
- kristjansson 3y ago
  This is everything. MSFT has no de jure power but all the de facto power.
coffeebeqn 3y ago
They can probably threaten to pull their funding, immediately (or in a few months) bankrupting the company

How are they leveraging them? My understanding is Microsoft has no power over the board.

by abi 3y ago

How are they leveraging them? My understanding is Microsoft has no power over the board.

paulddraper 3y ago

OpenAI needs the Microsoft partnership

gizmo 3y ago

They who control the gpus control the universe. There is a great chip shortage. If MS breaks the lease agreement with OpenAI (based on some pretext about governance) OpenAI won't be able to do any work nor will they be able to serve customer requests for the next year while they litigate this in court. Microsoft holds all the cards because they own the data centers.

Davidzheng 3y ago
If that's true why did they even fund openai. Why not just beat them at making LLMs
- wil421 3y ago
  When there’s a gold rush don’t be the one mining gold be the one selling shovels.
anonymouskimmer 3y ago
> If MS breaks the lease agreement with OpenAI The first thing OpenAI would ask a court for is a preliminary injunction to maintain the status quo while all of this works out in court. IANAL.
- rvba 3y ago
  The MS servers somehow can become buggy and work 10 000 times slower due to errors and bugs after a failed patch that takes months to find and fix
  - anonymouskimmer 3y ago
    That's asking for a contempt of court charge and jail time for Satya Nadella (though more likely just multi million dollar daily fines for MS).
bloomark 3y ago
> If MS breaks the lease agreement with OpenAI If that happens. AMZN, or GOOG will be all over that.

Terretta 3y ago

As a for instance, and I don't know, but it's plausible Microsoft has full license to use all tech, is the cloud operating it, and has escape clauses tied to "key persons". That combination could mean firing the CEO results in Microsoft getting to have everything and OpenAI being some code and models without a cloud, and whatever people that wouldn't cross the street with Altman. I do not know about OpenAI's deal with Microsoft. But I have been on both sides of deals written that way, where I've been the provider's key person and the contract offered code escrow, and I've been a buyer that tied the contract to a set of key persons and had full source code rights, surviving any agreement. You do this if you think the tech could be existential to you, and you pay a lot for it because effectively you're pre-buying the assets after some future implosion. OTOH, it tends to be not well understood by most people involved in the hundreds of pages of paperwork across a dozen or more interlocking agreements. . . . EDIT TO ADD: This speculating article seems to agree with my speculation, daddy has the cloud car keys, and key person ouster could be a breach: Only a fraction of Microsoft’s $10 billion investment in OpenAI has been wired to the startup, while a significant portion of the funding, divided into tranches, is in the form of cloud compute purchases instead of cash, according to people familiar with their agreement. That gives the software giant significant leverage as it sorts through the fallout from the ouster of OpenAI CEO Sam Altman. The firm’s board said on Friday that it had lost confidence in his ability to lead, without giving additional details. One person familiar with the matter said Microsoft CEO Satya Nadella believes OpenAI’s directors mishandled Altman’s firing and the action has destabilized a key partner for the company. It’s unclear if OpenAI, which has been racking up expenses as it goes on a hiring spree and pours resources into technological developments, violated its contract with Microsoft by suddenly ousting Altman. https://www.semafor.com/article/11/18/2023/openai-has-received-just-a-fraction-of-microsofts-10-billion-investment https://www.semafor.com/article/11/18/2023/openai-has-receiv...

junofan 3y ago

Surely Microsoft can terminate their Azure access? Why piss off your largest supplier?

icelancer 3y ago

Contracts are only worth their language if parties are willing to fight for them. Taking on Microsoft and hoards of angry billionaires with a piece of paper separating you from them might be more of a war than they expected.

kelsey9876543 3y ago
Contracts were made to be broken. Its always about who is more powerful, the law was designed for the wealthy to win every time.

dougmwne 3y ago

Riddle me this: what is an AI research lab without access to exascale compute? Who’s cloud infrastructure do they depend on fully right now?

kristjansson 3y ago
This is everything. MSFT has no de jure power but all the de facto power.

coffeebeqn 3y ago

They can probably threaten to pull their funding, immediately (or in a few months) bankrupting the company