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Microsoft Sets $100B AGI Profit Benchmark

Key Points

  • Microsoft has tied the certification of artificial general intelligence (AGI) to OpenAI generating $100 billion in profits, making the milestone a financial rather than purely technical benchmark.
  • Only a handful of firms in history—such as Amazon, Berkshire Hathaway, Apple, and Microsoft itself—have ever accumulated $100 billion or more in cumulative profits, highlighting how extraordinary the requirement is.
  • The deal is heavily skewed toward Microsoft, with the company poised to receive roughly 75 % of OpenAI’s profits until AGI is declared, and the terms were aggressively negotiated by Microsoft’s legal team.
  • OpenAI’s leadership, feeling pressure to secure server capacity, funding, and support, rushed the 2024 agreement to lock in a clear profit‑based “line in the sand” before the conversation around AGI ownership becomes more complex.

Full Transcript

# Microsoft Sets $100B AGI Profit Benchmark **Source:** [https://www.youtube.com/watch?v=r16LV0Zv_ek](https://www.youtube.com/watch?v=r16LV0Zv_ek) **Duration:** 00:05:18 ## Summary - Microsoft has tied the certification of artificial general intelligence (AGI) to OpenAI generating $100 billion in profits, making the milestone a financial rather than purely technical benchmark. - Only a handful of firms in history—such as Amazon, Berkshire Hathaway, Apple, and Microsoft itself—have ever accumulated $100 billion or more in cumulative profits, highlighting how extraordinary the requirement is. - The deal is heavily skewed toward Microsoft, with the company poised to receive roughly 75 % of OpenAI’s profits until AGI is declared, and the terms were aggressively negotiated by Microsoft’s legal team. - OpenAI’s leadership, feeling pressure to secure server capacity, funding, and support, rushed the 2024 agreement to lock in a clear profit‑based “line in the sand” before the conversation around AGI ownership becomes more complex. ## Sections - [00:00:00](https://www.youtube.com/watch?v=r16LV0Zv_ek&t=0s) **Untitled Section** - ## Full Transcript
0:00Microsoft has a 100 billion reasons to 0:04decide when AGI or artificial general 0:08intelligence is 0:09achieved that's right they agreed on a 0:12hundred billion dollar as the number 0:15that open AI has to hit in profits 0:19before the board of open AI will certify 0:24that artificial general intelligence has 0:25been achieved now most of the time when 0:28we think about what does it take for an 0:30AI to achieve general intelligence we 0:32don't think to ourselves how much money 0:35has it made lately but that's what 0:37Microsoft is thinking that's what Sacha 0:38nadela is thinking and I went and looked 0:41you may not know this I didn't know this 0:43when I looked I wanted to know how many 0:45companies in history have made a hundred 0:49billion dollar or more in profits over 0:52the course of the lifetime of the firm 0:56there's not very many Amazon crossed 0:59that that hundred billion doll number 1:01just a year or two ago after 25 years in 1:06business Saudia ramco has done it 1:08Berkshire Hathaway has done it Apple has 1:11done it yes Microsoft has done it too in 1:14fact the estimate for Microsoft is I 1:16think it's something like $700 billion 1:19over the course of the entire history of 1:22Microsoft and so if you look at sacha's 1:24bet here he's saying yeah you can say 1:27that artificial general intelligence has 1:30been achieved and get it done and 1:33reshape your relationship with Microsoft 1:36after you get to100 billion in 1:40profits that would be adding like 1:44another eighth to the total profits 1:48generated by Microsoft ever in its 1:50history of course Sacha wants to cut 1:52that deal and so to me what that says is 1:55that open AI is desperate for servers 2:00they're desperate for time they're 2:02desperate for support they need the 2:04partnership that Microsoft is bringing 2:06them in order to scale or they would not 2:09have cut this 2:10deal at the end of the day this is an 2:12extremely Microsoft favorable deal the 2:15Microsoft lawyers were all over this one 2:18as Sacha himself hinted in his interview 2:20a few weeks ago when he said that we're 2:22above around Below open 2:25AI That's code for we've got them 2:28surrounded 2:31they cut an incredible deal and the the 2:35reason all of this Matters by the way is 2:37that the original terms that Microsoft 2:40negotiated with open AI are that when 2:44general intelligence is achieved open AI 2:47can to some 2:49extent shift the value of that general 2:52intelligence into something that 2:53benefits Humanity more largely and they 2:56aren't obligated to continue to return 2:58as many of the profits to Microsoft is 3:00possible I think it's said 75% or 3:02something of the profits go to Microsoft 3:04for the duration of the partnership 3:06until AGI is achieved that was left 3:10nicely undefined until now when 3:13Microsoft wanted to put a definition to 3:14it and I think part of why Sacha wanted 3:16to rush this in 2024 is he sees the 3:19writing on the wall he sees how fast the 3:23team at open AI is developing 3:25intelligence he doesn't want to wait 3:27around and have an even more complicated 3:29convers ation next year he wanted to 3:31close this out and so what he did was he 3:34said we need a Line in the Sand we need 3:37to negotiate this cleanly and the 3:39cleanest line is financial and 3:40conveniently the cleanest Financial line 3:43is extremely favorable to 3:47Microsoft now you can stretch a point 3:49and squint at it and say I guess it's 3:52general intelligence if it does $100 3:54billion worth of profitable 3:56work maybe that's what the lawyers were 3:58arguing but to me it seems like an 4:00extremely stretched definition of 4:02general intelligence and one that's 4:04extremely Microsoft favorable and given 4:07the very very short list of companies 4:09maybe 10 total in the world that have 4:11generated a hundred billion dollars or 4:12more over the course of the firm's life 4:15open AI is going to have to get 4:16extremely lucky just to get to that 4:19number ever it is quite possible that we 4:21will be in a world where open AI is 4:24sucking up chips sucking up data centers 4:28spending like crazy to BU build and they 4:30will hit their burn rate and it will be 4:32so high they will not be in any position 4:35to generate massive profits for a parent 4:38company for a long time to come if ever 4:40it is extremely unusual for any company 4:43ever in the history of the world to hit 4:44a hundred billion do why would open AI 4:47be different yes they may have stumbled 4:50upon intelligence but the cost of 4:51innovation remains high and they may not 4:53actually be in the best position to 4:55harvest the value there so we will have 4:58to see but to me this looks like 5:00a Microsoft favorable deal that tells me 5:02that open AI is pretty desperate right 5:05now they had to cut this deal let me 5:08know what you think is the correct 5:10definition of general intelligence 5:12hundred billion doll yes no I don't 5:15think it is