OpenAI's Transition to Independence from Microsoft

“OpenAI and Microsoft announced a fundamental rewrite of the partnership that has powered most of the consumer AI revolution. Microsoft loses its exclusive license to OpenAI's models, and OpenAI is now free to sell its products on AWS, Google Cloud, and basically anywhere it wants. So Microsoft was kind of holding this back for quite a while here, and I think OpenAI hated this because you saw Anthropic get massive adoption with enterprise.”

“Cortex two is going to think first before it sees and and makes an action. It runs possible actions through a learning model of physics and object behavior. So, you know, it's like looking at a stack of books, and it's like, if I move forward too fast and bump that over, this is what's gonna happen. If I move my arm to grab this book, this is what's gonna happen. So it's like predicting what its actions will, you know, what what course what things will happen.”

“Silver thinks that the most important part of intelligence is what he's calling ineffable, meaning you you literally can't capture them in language. So LLMs, which are kind of next token prediction models. Right? These are instead of, you know, human text or something. He's saying that those are gonna hit a ceiling, and his bet is a different path entirely. He's betting on massive scale reinforcement learning agents that learn from their own experience, world models, and what he and Rich Sutton wrote up last year as the, quote, era of experience.”

“Judge Gonzales Rogers could effectively pause OpenAI's for profit conversion or rewrite the rules for how nonprofit AI labs become commercial entities, which I think, like, there's a lot of cascading impacts that could happen onto anthropic and I think onto the next kind of gen of these AI models. Over on x, Kara Swisher called it, quote, the case that determines whether AI's foundational nonprofit promise means anything.”

“The exclusive sale channels, was, you know, Microsoft's actual moat. Equity in OpenAI is awesome, but it doesn't really protect Azure's enterprise pipeline. And the entire reason that Azure outgrew AWS over the last two years was the OpenAI lock in. So many companies were forced to move over to Azure if they wanted to get the latest and greatest from OpenAI because that was the only place it was going. AWS now gets to compete on price and surface area with the exact same model.”

“And second, I think, this is kind of the formal end of the standoff that leaked in OpenAI internal memo on April 13, where OpenAI's revenue chief, Dennis Dresser, basically told all of the staff that the Microsoft partnership had, quote, limited our ability to reach enterprise customers. And I think that demand for the Amazon Bedrock offering was, quote, frankly, staggering. So today's announcement is essentially OpenAI legalizing what they were already doing.”