OpenAI and Microsoft tensions are reaching a boiling point
(wsj.com)80 points by jmsflknr 10 hours ago
80 points by jmsflknr 10 hours ago
That sentence made me assume OpenAI leaked this story to WSJ as a negotiating tactic. You're right that leaking this indicates OpenAI's position is weak. The threat to make an antitrust complaint is also strange since 'going nuclear' like that probably wouldn't help OpenAI soon enough to matter. Antitrust action isn't fast. So all it would do is potentially hurt MSFT and prove OpenAI is a risky partner willing to torch one of their largest partner/investors.
The $13bn investment in 2023 was so clearly structured to skirt antitrust concerns that it's unsurprising that that avenue is discussed.
Since then, MSFT has made other regulatory-aggressive investments, and the recent Meta / Scale AI is similarly aggressively designed.
Disagree. This is a natural consequence of government anti-trust becoming less principled (what I mean by that is that the consumer welfare standard is somewhat objective even if you feel it's suboptimal). It's easier for companies to lobby and try and influence the process, particularly when less principled folks are in office.
Antitrust is the zeitgeist, but it seems that among tech companies, OpenAI is the least interested in competing on the merits.
First they said it was in everyone's interest for them to be released from their nonprofit obligations. Then they argued that AI needed to be regulated—just enough to deter new competition, but not so much that it could affect OAI's plans in any way. Now they want to be released from the Microsoft deal.
Usually with anticompetitive practices you think about abuse of market power. But OpenAI's mindset seems to be that any impediment to them dominating AI is a societal problem that the government needs to fix for them. It's remarkable.
Ah, this sheds light on the silence around the Windsurf acquisition:
OpenAI and Microsoft are at a standoff over the terms of the startup’s $3 billion acquisition of the coding startup Windsurf, the people said. Microsoft currently has access to all of OpenAI’s IP, according to their agreement. It offers its own AI coding product, GitHub Copilot, that competes with OpenAI. OpenAI doesn’t want Microsoft to have access to Windsurf’s intellectual property.
> Microsoft currently has access to all of OpenAI’s IP, according to their agreement. [...] OpenAI doesn’t want Microsoft to have access to Windsurf’s intellectual property.
Why does OpenAI then buy Windsurf if such an agreement is in place?
I can't tell if that line came from the unnamed sources or is just the journalist's understanding, but it seems pretty clear to me that OpenAI did not spend $3B for the source code of an IDE. They wanted the employees and customers to kickstart a shift to an enterprise product focus, which doesn't sit well with MSFT (who entered into a partnership with what they believed was a research lab that would supply things they could upsell in github and office365).
One theory is it's Sam Altman's way of wresting control away from the non-profit through diluting the shares.
It's not like he hasn't done such things before.
Sama seems disinclined to follow the straight and true. Apparently he can’t get what he wants without re-routing his partner’s buy-in buttons. Could he have founded OpenAI without all this drama? Was there no way to raise the money he needs without all the smoke and mirrors?
I’m a fan of the ChatGPT product but he feels like a David Mamet creation.
Just a few days ago, news came that OpenAI is tapping Google Cloud for access to more compute resources: https://www.reuters.com/business/retail-consumer/openai-taps...
IIRC when Microsoft invested in OpenAI, it was supposed to use Azure only.
Isn’t that because Microsoft gets GPUs from Oracle now instead.
https://www.techradar.com/pro/microsoft-is-renting-gpu-power...
OpenAI keeps positioning itself as a scrappy little innovator, and anything that makes it harder for them to become the next trillion dollar company is anti-competitive. But the amount of funding they've received in proportion to their revenue is truly astounding. If anything is anti-competitive, it's that Softbank, MS, and others have poured billions into this one company in hopes of burying the chances of other startups. If the feds should do anything (which I doubt), it's to ban further investment in OpenAI.
All organizations that are reasonably large and for which cloud costs is a large portion of expenses have an abstraction layer to switch between providers. Otherwise it’s impossible to negotiate better deals, you can’t play multiple cloud providers against each other for a better rate.
imagine these companies making antitrust complaints against one another while both companies have explicitly anticompetitive legal terms that mean users can’t fine tune ai on data they “own”
Yeah. The software industry very quickly forgot what made it hyper successful in the first place: developing solutions that people actually wanted and that made their lives more convenient. You didn't have to advertise too much since these products naturally go viral because, surprise surprise, when you make something good people let other people know how good it is.
Now the industry has been reduced to desperately trying to brute force crap that nobody wants.
> You didn't have to advertise too much since these products naturally go viral
Are you really sure about this? ;-)
https://archive.ph/4HP14