Okay let’s take your argument at face value. What do you think a trillion dollar market cap company can do with a license and by extending offers to all of OpenAI’s disaffected employees?

Think of what Apple can do with a license to ARM and now compare that to what MS could do with a license to GPT 3?

Do you really think any company would depend on another companies technology the way that MS is dependent on OpenAI without having a favorable license?

I’ve dealt with something similar on a very minute scale on both sides - being a dev lead at a startup where our largest customer accounted for 70% of our revenue and being the dev lead where the company I was working for accounted for 70% of a vendors revenue.

Each time, I saw how much power the customer yielded. It involves lawyers, licensing, contingencies, etc. and in both of the cases above - escrowing of code where the customer got the rights in certain conditions.

I’m 100% sure that MS has better lawyers than I encountered.

Let's assume Microsoft can freely use present-day ChatGPT in its products. If Microsoft wanted to further develop ChatGPT in-house, I imagine the effort would resemble Apple's in-house modem struggles due to tiptoeing around Qualcomm's patents.

You can't compare a hostile OpenAI with a cooperative ARM. Even with a cooperative OpenAI, Microsoft restricts internal researcher access to the source code, so the license appears less favorable than you think.

Now let’s assume that Apple could hire 90% of Qualcomm’s engineers and not have to worry about patent lawsuits…

Again I’m 100% sure that Microsoft wouldn’t base its entire technology line on another company’s IP without having very favorable licenses. That’s just not how these things work.

They've hired a bunch. Tech giants pass everything through legal—too big not to. IP & patents remain a PITA regardless of market cap.

Licensing ChatGPT versions developed by OpenAI seems favorable enough to me. The question boils down to what happens if OpenAI stops development. I highly doubt the bright minds at OpenAI gave away their IP for widely available compute credits.

No matter how bright they are, I am sure I read somewhere that the employees had all succumb to an addiction to food and shelter early in life and haven’t overcome that addiction.

Unless they are a gang of thieves, they are all exchanging labor for money to support their addiction. Who do you really think has the negotiating power in this relationship?

Not Microsoft? Otherwise people would've jumped ship long ago. None of this letter writing and PR campaign.

The smaller OpenAI that signed the Microsoft agreement had plenty of sustenance. Compute remains fungible unlike LLMs.

There are only two other companies with the amount of compute available that OpenAI needs - AWS and GCP. And GCP is a non starter and a distant third in cloud.

And if you think a migration at that scale is “easy” you haven’t been involved with mass migrations. Besides, Microsoft’s enterprise customers aren’t going to jump ship to another cloud provider and follow OpenAI.

Before I was giving anecdotes from n-6 job working at a startup and my n-3 job when I was on the other side of the table as a vendor’s largest customer.

This part of knowing how the cloud industry and migrations work comes from my n-1 job working in the Professional Services Department at AWS when I was involved with large migrations and saw how sticky enterprises were when it came to dealing with Microsoft.

And what does OpenAI have to offer another company with Microsoft already having 49% equity?

First, I meant people would've already jumped ship to Microsoft en masse without bothering with the OpenAI board fiasco if Microsoft truly held all the cards. I suspect they do not.

Second, I meant the OpenAI that signed the initial agreement with Microsoft years ago already had ample resources and funding. In those negotiations, OpenAI would have had little incentive to hand over all their IP regardless of the offer on hand.

We are witnessing right now that most of OpenAIs employees are ready to jump ship now that Altman is leaving. The facts on the ground changed.

Also, it’s standard in many contracts that you can’t actively poach a partner’s employees. That doesn’t mean that if the employees actively reach out to you, you can’t hire them. I saw that at AWS.

If they had so much funding why were they willing to give up 49% of the company to Microsoft? Does that read like a company that could be picky?

The fact that Sam and the employees have waged this PR campaign suggests the board still sits on something of value. I guess we'll see who flinches first.

OpenAI gave up 49% equity because they thought Microsoft gave a fair valuation and terms, among other possible reasons. OpenAI wanted to scale up their LLM research so they signed the agreement. I don't think OpenAI negotiated from a position of weakness.