Expert panel will determine AGI arrival in new Microsoft-OpenAI agreement

On Monday, Microsoft and OpenAI announced a revised partnership agreement that introduces an independent expert panel to verify when OpenAI achieves so-called artificial general intelligence (AGI), a determination that will trigger major shifts in how the companies share technology and revenue. The deal values Microsoft’s stake in OpenAI at approximately $135 billion and extends the exclusive partnership through 2032 while giving both companies more freedom to pursue AGI independently.

The partnership began in 2019 when Microsoft invested $1 billion in OpenAI. Since then, Microsoft has provided billions in cloud computing resources through Azure and used OpenAI’s models as the basis of products like Copilot. The new agreement maintains Microsoft as OpenAI’s frontier model partner and preserves Microsoft’s exclusive rights to OpenAI’s IP and Azure API exclusivity until the threshold of AGI is reached.

Under a previous arrangement, OpenAI alone would determine when it achieved AGI, which is a nebulous concept that is difficult to define. The revised deal requires an independent expert panel to verify that claim, a change that adds oversight to a determination with billions of dollars at stake. When the panel confirms that AGI has been reached, Microsoft’s intellectual property rights to OpenAI’s research methods will expire, and the revenue-sharing arrangement between the companies will end, though payments will continue over a longer period.

The companies did not disclose who will serve on the expert panel or how panel members will be selected. The lack of details about the panel’s composition leaves open questions about what criteria the experts will actually use to verify that AGI has been achieved. Previously, the two companies had agreed on a somewhat arbitrary economic threshold of when AI systems can generate $100 billion in profits.

The partnership, one of the most watched in the tech space, has shown strain as OpenAI has grown from a spunky research lab with high hopes into a company valued at $500 billion that sways the trajectory of the tech industry with its moves in AI. Both companies now compete for customers, and OpenAI has been seeking more compute capacity than Microsoft can provide.