Microsoft and OpenAI have a financial definition of AGI: Report

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Microsoft and OpenAI have reportedly redefined the concept of Artificial General Intelligence (AGI), not as a philosophical or technical achievement, but through a financial lens. According to a recent report from The Information, the two companies have an internal agreement tying the realization of AGI to a profit threshold—specifically, AI systems capable of generating $100 billion in profits.

A Financial Twist on AGI

Traditionally, AGI refers to artificial intelligence systems that can perform any intellectual task a human can, encompassing a broad range of capabilities with no limitations. However, the Microsoft-OpenAI definition diverges from this, focusing on the financial impact rather than purely technical milestones. This unique perspective suggests that AGI is less about achieving a technological ideal and more about hitting monumental commercial success.

By this definition, OpenAI appears to be years away from achieving AGI. Reports indicate the company is on track to incur billions in losses this year, with profitability not expected until 2029. This raises important questions about the feasibility of AGI under these financial constraints.

The Implications for Microsoft

The agreement between Microsoft and OpenAI has another critical element: Microsoft’s access to OpenAI’s groundbreaking technology is contingent on OpenAI not achieving AGI. Once OpenAI crosses the AGI threshold as defined by this $100 billion profit benchmark, Microsoft would lose access to its AI models.

This arrangement could play a pivotal role in shaping the timeline for declaring AGI. Speculation has surfaced that OpenAI might be incentivized to declare AGI prematurely to sever ties with Microsoft, but this financial benchmark ensures that Microsoft could retain access to OpenAI’s innovations for years, potentially even a decade or more.

OpenAI’s Current Challenges

OpenAI’s current AI models, including the recently released o3, have sparked debates about whether they signify progress toward AGI. While the o3 model reportedly outperforms its predecessors, its high computational costs pose a significant barrier to profitability. This reality further underscores the challenges OpenAI faces in meeting the profit-driven definition of AGI.

A Redefinition of Expectations

The financial framing of AGI underscores the evolving nature of AI development in a competitive, profit-driven landscape. It also highlights the tension between advancing AI capabilities and achieving sustainable business outcomes.

For Microsoft, this unique agreement is both a safeguard and a potential limitation. For OpenAI, it sets a daunting but clear financial target that will influence its long-term strategies.

As the tech industry watches closely, this profit-based definition of AGI could reshape how the field measures success, balancing innovation with economic viability.