Satya Nadella, fountain pen diehard and Microsoft CEO, has made it plain: The company has comprehensive access to the intellectual property of OpenAI’s models and system design. When asked during a podcast interview how much access Microsoft had to OpenAI's intellectual property, Nadella offered a three-word response: "All of it."
What "all of it" means
And why that's a huge deal for Microsoft
OpenAI CEO Sam Altman
Nadella broke the news about an hour into a wide-ranging podcast interview released this week in sync with the announcement of new Microsoft data centers. While the news broke late last month, Nadella seized the opportunity to confirm the breathtaking fact this week. It sends a signal of Microsoft's strength and stability to corporate customers, retail consumers, and would-be competitors.
The move enables the tech giant to save money and avoid costly mistakes as it develops its own AI software and hardware. Other companies with just API access to OpenAI don’t have that luxury.
Nadella was also quick to follow up in the interview that Microsoft, which was an early investor in OpenAI, "bootstrapped" the startup a decade ago when it was just getting started. "By the way, we gave them a bunch of IP as well to bootstrap them," he said in the interview. "This is one of the reasons why they... Because we built all these supercomputers together. We built it for them and they benefited from it, rightfully so."
Meanwhile: Microsoft is expanding
A data center here, a data center there
Microsoft is significantly expanding the number of its Fairwater AI data centers in Atlanta and Milwaukee, which will enhance the compute power of its Azure cloud platform, as the data centers in those regions will eventually combine their work. As this expansion is happening, Microsoft now owns 27% of OpenAI’s for-profit entity, or about 135ドル billion.
"We’ve signed a new definitive agreement that builds on our foundation, strengthens our partnership, and sets the stage for long-term success for both organizations," stated an October 28 Microsoft press release. OpenAI is now valued at 500ドル billion following its latest funding round.
Nadella's "all of it" comment — made on the Dwarkesh Podcast, by the way — is a sort of verbal confirmation of that late-October announcement, which spells out that essentially, Microsoft has exclusive rights to use OpenAI’s "confidential methods used in the development of models and systems." However, those rights do not include OpenAI’s planned consumer device that OpenAI CEO Sam Altman is working on with famed iPhone designer Jony Ive.
When do the exclusive rights end?
It will be the second-most important story that day
Microsoft’s exclusive rights to OpenAI’s research will expire as soon as Artificial General Intelligence is achieved.
It’s still only a theory, but essentially, AGI will arrive at the point when AI can perform any thinking task that a human can.
Who decides when we’ve reached the AGI milestone? For the sake of this agreement between Microsoft and OpenAI, it’s an "independent expert panel."
What’s next
In the near term, this new agreement between Microsoft and OpenAI, which spurred Nadella’s matter-of-fact "all of it" response, means that Microsoft has an advantage that its competitors cannot claim. It also means that it can develop its own chip at its own pace, ensuring that it's perfect and not first.
The debut of a Microsoft-made AI accelerator, such as the in-development Maia 200, means that the company can eventually stop using hardware made by Nvidia and AMD, thereby lowering the "TCO," or total cost of ownership for the company.