AGI Clause Sparks Showdown: Microsoft and OpenAI Wrestle for Control of AI’s Future

Things are getting tense at the top of the AI food chain. The heart of the feud between Microsoft and OpenAI is a contract clause tied to Artificial General Intelligence (AGI)—a milestone that, if declared, could radically shift control over some of the most powerful AI tech on the planet.

Here’s what’s going down:

• The AGI Clause: Since 2019, Microsoft-OpenAI contract has included a provision that allows OpenAI to limit Microsoft’s access to its technology once AGI is achieved.
• Definition Dispute: OpenAI defines AGI as a system that outperforms humans at most economically valuable work. Microsoft argues that such a declaration is subjective and could be used to unfairly cut them out.
• Trigger Tiers: OpenAI reportedly has an internal paper outlining “Five Levels of General AI.” The contract now includes two tiers:
  • AGI: Declared unilaterally by OpenAI’s board.
  • Sufficient AGI: Tied to economic performance and requires Microsoft’s approval.
• What’s at Stake: Microsoft has invested over $13 billion and holds a 35% equity stake in OpenAI’s for-profit arm. The contract prevents Microsoft from developing AGI independently until 2030.
• Philosophy Meets Power Play: OpenAI’s leadership believes AGI is near. Microsoft CEO Satya Nadella has dismissed unilateral declarations as “nonsensical benchmark hacking.”

This isn’t just a corporate spat—it’s a philosophical and economic tug-of-war over the future of intelligence itself. Want to dig into how this could reshape the AI landscape or what it means for developers and users like us?