8 ms·
FTC wants Microsoft's relationship with OpenAI under the microscope
- yellow_lead 3y ago> Microsoft's investment does not amount to control of the company. We can't know this without seeing the agreement. > ""While details of our agreement remain confidential..."
- DalasNoin 3y agoI wonder if this was triggered by Microsoft having a big part in forcing Sam back into OpenAI. Certainly, housing the infrastructure and compute of OpenAI gives them some effective power.
- manojlds 3y agoBut that's not how it played out though. MS offered them a new home, so from the outside at least, they had leverage that any other player could have had.
- lolinder 3y agoMS very quickly had an agreement with the ex-CEO to form OpenAI 2.0 within Microsoft. Maybe another player could have done that, but it seems more likely that Sam Altman and Microsoft have a Special Relationship.
- AlexandrB 3y agoNot based on what Satya Nadella said in an interview: > "We have all the rights and all the capability. I mean, look, right, if tomorrow, if OpenAI disappeared, I don't want any customer of ours to be worried about it, quite honestly, because we have all of the rights to continue the innovation, not just to serve the products."[1] If you're an OpenAI employee looking to continue working on the product, would you rather go to SalesForce and start from scratch or Microsoft and continue (roughly) where you left off? [1] https://stackdiary.com/satya-nadella-we-have-all-the-rights-and-all-the-capability/ https://stackdiary.com/satya-nadella-we-have-all-the-rights-...
- nicce 3y agoWhat we do know is that Microsoft has exclusive permission to all OpenAI products, until AGI is reached. Do we need to know the rest?
- cyanydeez 3y agoI second that
- Racing0461 3y agoWhy? neither MSFT or OAI are monopolies in the AI space.
- lolinder 3y agoYou don't need to be a monopoly to be engaging in anticompetitive practices. The ideal time for an antitrust action is before the trust has successfully eliminated all competing businesses. I'm not even saying that OpenAI/MSFT are being anticompetitive, but I certainly see no problem with the FTC keeping an eye on them, especially given Microsoft's track record.
- m463 3y agoI was curious and their mission: "is the enforcement of civil (non-criminal) antitrust law and the promotion of consumer protection." https://en.wikipedia.org/wiki/Federal_Trade_Commission https://en.wikipedia.org/wiki/Federal_Trade_Commission So it could be antitrust or consumer protection.
- tw04 3y agoOn what planet are they ever going to eliminate other AI? Neither Amazon, nor Google are at any risk of going bankrupt, and I can say with 100% certainty both will continue to build their own AI while solvent. That’s to say nothing of competitors coming out of Europe and Asia.
- lolinder 3y agoYou could have said the same thing about Windows Phone—Microsoft had every reason to keep trying to win this new market, and they certainly weren't going bankrupt, but eventually they had to concede it wasn't going to happen.
- 3y ago
- rymiel 3y agoYou need a microscope because otherwise you can't even tell them apart?
- Dalewyn 3y agoMicrosoft.
- sremani 3y agoThere are two parallel thoughts going in my mind. 1. smoke and mirrors 2. hatchet job as a favor to Google for old times sake (healthcare.gov resurrection etc. relations). Either way, this will not go anywhere, because Microsoft is run by competent people and FTC is not. edit: upon further reading, retribution for losing Microsoft-Activision merger could be a possible thing too. But my final observation still stands.
- Dig1t 3y agoIt is a shame that the FTC was not this proactive when Google and Facebook were buying up every company in sight that might have turned into competition for them. Does this represent progress for the FTC? Or does Microsoft get extra scrutiny because of its history with anticompetitive practices?
- stackskipton 3y agoSince Carter/Reagan, FTC has historically not challenged these mergers because FTC and other legal agencies got swallowed up by Robert Bork who basically convinced them that monopolies are actually good. So FTC and other agencies basically listened to paid off economists who were like "This merger will be fine for consumers" https://www.promarket.org/2019/09/05/how-robert-bork-fathered-the-new-gilded-age/ https://www.promarket.org/2019/09/05/how-robert-bork-fathere... Lina Khan has changed FTC which is why you see wave of this action but obviously anything law, it's very slow going.
- coldpie 3y ago> Does this represent progress for the FTC? Yes. The FTC has been largely dormant on antitrust issues for 40 years. That changed for the first time under the current administration, but it's going to take a huge lift and a lot of time to rebuild the FTC into an agency that can once again do antitrust stuff. I'm hoping they get that time to rebuild. As you noted, we desperately need to reign in these huge companies & mergers.
- RcouF1uZ4gsC 3y agoIt is basically Lina Khan doing all this. However, it is pretty useless as the courts have slapped down her attempts pretty regularly. It makes great headlines, but I don't think anything will come of it.
- tiahura 3y agoIt’s a bit hard to figure out what she thinks she’s going to accomplish here. This isn’t Call of Duty. MS/OpenAI has national security implications. There’s a reason SpaceX gets what it wants in the end with the FAA and EPA.
- tqi 3y agoThat does seem to how the FTC is operating, if this NY Mag article is to be believed: https://nymag.com/intelligencer/2023/12/lina-khans-rough-year-running-the-federal-trade-commission.html https://nymag.com/intelligencer/2023/12/lina-khans-rough-yea... Who could have predicted that turning a large, complicated, wide-ranging bureaucracy over to a 32 year old with little operating experience wouldn't yield the great results?
- helsinkiandrew 3y agoMatt Levine on Bloomberg pointed out that originally the OpenAI structure chart had MS as a minority owner: https://web.archive.org/web/20231109140650/https://openai.com/our-structure https://web.archive.org/web/20231109140650/https://openai.co... But now call it a minority economic interest: https://openai.com/our-structure https://openai.com/our-structure There are many financial arrangements that are not traditional ‘ownership shares of a company’ that the SEC treats as ownership in some ways for reporting, eg Total Return Swaps. As the agreement isn’t public it’s right that it should be investigated.
- JoshTriplett 3y agoAre there any circumstances under which a revenue-share agreement with employees (e.g. a commitment to split x% of revenue or x% of profit with employees as a bonus) gets considered any form of ownership, as opposed to simply compensation?
- cma 3y agoFTC is different than the SEC though.
- deleted 3y ago[deleted]
- Animats 3y agoMaking an offer to hire all the employees because you don't like what the board is doing does tend to attract regulatory attention.
- bko 3y agoI think Microsoft offered them the jobs because a large number signed a petition suggesting they were unhappy. Salesforce made a similar offer so I guess by that logic, Salesforce should receive similar scrutiny https://m.economictimes.com/tech/technology/salesforce-ceo-offers-jobs-to-any-openai-researcher-who-has-quit/amp_articleshow/105374793.cms https://m.economictimes.com/tech/technology/salesforce-ceo-o...
- lolinder 3y agoSalesforce didn't also announce that they'd hired the ex-CEO, nor did Salesforce have a $10 billion investment in the company prior to that. Salesforce also didn't get a board observer after the ex-CEO was hired back. It's the combination of factors that are raising eyebrows, not any one of them.
- AlexandrB 3y agoThere's also this from Satya Nadella: > "We have all the rights and all the capability. I mean, look, right, if tomorrow, if OpenAI disappeared, I don't want any customer of ours to be worried about it, quite honestly, because we have all of the rights to continue the innovation, not just to serve the products."[1] Microsoft has access to OpenAI IP that SalesForce or others do not. [1] https://stackdiary.com/satya-nadella-we-have-all-the-rights-and-all-the-capability/ https://stackdiary.com/satya-nadella-we-have-all-the-rights-...
- cma 3y agoSo once the profit cap is hit, won't all employees just move to Microsoft for further stock compensation with a chance of appreciation, vs OpenAI's dead end stock? And likewise what stops the non-profit from just creating a second for-profit with all the IP too: "No Profit Cap OpenAI 2, inc."
- theknocker 3y ago[dead]
- FergusArgyll 3y agohelp, there's a new company that just made ~500 employees into millionaires. That raises inequality, not everyone can be a millionaire, fear not, the government is here. no more inequality.
- skilled 3y agoAnd how much of this would be going on if OpenAI was some thrift store company? Oh right... none.
- Geezus_42 3y agoWhat's your point?
- jankovicsandras 3y agoSome questions: Could OpenAI exist without Microsoft? Which other tech company has meaningful ownership / economic interest of OpenAI? Is OpenAI collaborating with any of Microsoft's competitors (e.g. Google, Apple, Facebook etc.) in a meaningful way? What practical difference (e.g. price, privacy) would people experience if OpenAI would be a 100% Microsoft owned subsidiary vs. the current situation?
- peteradio 3y agoOpenai did exist without Microsoft and there's no need for cloud when all you really need is compute.
- cj 3y agoCould a 2nd OpenAI (with the same scale as OpenAI) exist without Microsoft (or another cloud provider) giving preferential access to resources?
- peteradio 3y agoIs Microsoft the only company with compute?
- nailer 3y agoI imagine not, hence 'or another cloud provider' in the comment you're replying to.
- peteradio 3y agoWhat about training openais models requires 9 9s distributed availability? Cloud is not the only form of supercomputing in fact it's probably the worst since you don't need the cloud aspect you only need the compute. Once trained you have no need for a cluster and your dependence on cloud is not an essential part of the business. Turning it around.. what am I missing? What cloud features are essential to openais?
- hospitalJail 3y agoMicrosoft is a scary company. I try to avoid all business with them if possible.
- 1-6 3y agoNon-profits are required to take meeting minutes by law. The FTC will have information about OpenAI’s board.