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.
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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
Microsoft has a 100 billion reasons to
decide when AGI or artificial general
intelligence is
achieved that's right they agreed on a
hundred billion dollar as the number
that open AI has to hit in profits
before the board of open AI will certify
that artificial general intelligence has
been achieved now most of the time when
we think about what does it take for an
AI to achieve general intelligence we
don't think to ourselves how much money
has it made lately but that's what
Microsoft is thinking that's what Sacha
nadela is thinking and I went and looked
you may not know this I didn't know this
when I looked I wanted to know how many
companies in history have made a hundred
billion dollar or more in profits over
the course of the lifetime of the firm
there's not very many Amazon crossed
that that hundred billion doll number
just a year or two ago after 25 years in
business Saudia ramco has done it
Berkshire Hathaway has done it Apple has
done it yes Microsoft has done it too in
fact the estimate for Microsoft is I
think it's something like $700 billion
over the course of the entire history of
Microsoft and so if you look at sacha's
bet here he's saying yeah you can say
that artificial general intelligence has
been achieved and get it done and
reshape your relationship with Microsoft
after you get to100 billion in
profits that would be adding like
another eighth to the total profits
generated by Microsoft ever in its
history of course Sacha wants to cut
that deal and so to me what that says is
that open AI is desperate for servers
they're desperate for time they're
desperate for support they need the
partnership that Microsoft is bringing
them in order to scale or they would not
have cut this
deal at the end of the day this is an
extremely Microsoft favorable deal the
Microsoft lawyers were all over this one
as Sacha himself hinted in his interview
a few weeks ago when he said that we're
above around Below open
AI That's code for we've got them
surrounded
they cut an incredible deal and the the
reason all of this Matters by the way is
that the original terms that Microsoft
negotiated with open AI are that when
general intelligence is achieved open AI
can to some
extent shift the value of that general
intelligence into something that
benefits Humanity more largely and they
aren't obligated to continue to return
as many of the profits to Microsoft is
possible I think it's said 75% or
something of the profits go to Microsoft
for the duration of the partnership
until AGI is achieved that was left
nicely undefined until now when
Microsoft wanted to put a definition to
it and I think part of why Sacha wanted
to rush this in 2024 is he sees the
writing on the wall he sees how fast the
team at open AI is developing
intelligence he doesn't want to wait
around and have an even more complicated
convers ation next year he wanted to
close this out and so what he did was he
said we need a Line in the Sand we need
to negotiate this cleanly and the
cleanest line is financial and
conveniently the cleanest Financial line
is extremely favorable to
Microsoft now you can stretch a point
and squint at it and say I guess it's
general intelligence if it does $100
billion worth of profitable
work maybe that's what the lawyers were
arguing but to me it seems like an
extremely stretched definition of
general intelligence and one that's
extremely Microsoft favorable and given
the very very short list of companies
maybe 10 total in the world that have
generated a hundred billion dollars or
more over the course of the firm's life
open AI is going to have to get
extremely lucky just to get to that
number ever it is quite possible that we
will be in a world where open AI is
sucking up chips sucking up data centers
spending like crazy to BU build and they
will hit their burn rate and it will be
so high they will not be in any position
to generate massive profits for a parent
company for a long time to come if ever
it is extremely unusual for any company
ever in the history of the world to hit
a hundred billion do why would open AI
be different yes they may have stumbled
upon intelligence but the cost of
innovation remains high and they may not
actually be in the best position to
harvest the value there so we will have
to see but to me this looks like
a Microsoft favorable deal that tells me
that open AI is pretty desperate right
now they had to cut this deal let me
know what you think is the correct
definition of general intelligence
hundred billion doll yes no I don't
think it is