Posted by meetpateltech 10/28/2025
I think it's funny and telling that they've used the word "declare" where what they are really doing is "claim".
These guys think they are prophets.
https://techcrunch.com/2024/12/26/microsoft-and-openai-have-...
I think you can rebuild human civilization with that.
I feel like replacing highly skilled human labor hardly makes financial sense, if it costs that much.
Or maybe since it is ultimately an agreement about money and IP, they are fine with defining it solely through profits?
MS: I just wanted you to know that you can't just say the word AGI and expect anything to happen.
OpenAI: I didn't say it. I declared it.
You say this somewhat jokingly, but I think they 100% believe something along those lines.
Accidental misquote?
What's the value in investing in a smaller company and then giving up things produced off that investment when the company grows?
An investor can be stubborn about retaining all rights previously negotiated and never give them up... but that absolutist position doesn't mean anything if the investment fails.
OpenAI needs many more billions to cover many more years of expected losses. Microsoft itself doesn't want to invest any more money. Additional outside investors don't want to add more billions in funding unless Microsoft was willing to give up a few rights so that OpenAI has a better competitive position against Google Gemini, Anthropic, Grok etc.
When a startup is losing money and desperately needs more capital, a new round of investors can chip away at rights the previous investor(s) had. Why would previous original investors voluntarily agree to give up any rights?!? Because their investment is at risk if the startup doesn't get a lot more money. If the original investor doesn't want to re-invest again and would rather others foot the bill, they sometimes have to be a little flexible on their rights for that to happen.
This looks more like Microsoft ensuring that they'll win, regardless of how OpenAI fairs in the next four to six years.
Having a customer locked in to buying $250bn of Azure services is a fairly big benefit.
"Microsoft will no longer have a right of first refusal to be OpenAI’s compute provider."
Seems like a loss to me!
The best part is that the web is forever poisoned now, 80% of the content is generated by LLM and self poisoning
Anecdata: our product is using a number of these models in production.
Ironically, I'll bet you $500 that OpenAI and Anthropic's models are far more subsidized. We can be almost sure about this, given the losses that they post, and the above fact. These providers are effectively hardware plays, they can't just subsidize at scale and they're a commodity.
On top of that I also mentioned size vs quality, where they're also frontier. Size ≈ cost.
Also, congrats on the traction ! Being profitable enough to support a family is 95% area-CoL and family size so not sure about that one, but if you're doing that many tokens you've clearly got a good number of active users. We're at a similar point but only 100-200 million tokens per month, strictly B2C app though so that might explain it, tends to be less token heavy.
2.5 Flash is still fantastic especially if you're really input heavy, we use it too for many things, but we've found several open weights models to have better price/quality for certain tasks. It's nice that 2.5 Flash is fast but then speed is most important for longer outputs and for those Flash is relatively expensive. DeepSeek v3.1 is all-around cheaper, for one example.
Thanks for the kudos, it's going well so far. But I'm in NYC and have kids, so...the bar is high :)
What probably happened:
1. MS's accountants raised a warning
2. Existing agreement prohibited disclosure of terms
3. MS told OpenAI that wasn't acceptable and MS needed to publicly report details today
4. OpenAI coordinated release of this, to spin the narrativehttps://blogs.microsoft.com/blog/2025/10/28/the-next-chapter...
Also: Built to Benefit Everyone — by Bret Taylor, Chair of the OpenAI Board of Directors
Whats my share then?
> "OpenAI can now provide API access to US government national security customers, regardless of the cloud provider."
And this one might be related:
> "OpenAI can now jointly develop some products with third parties. API products developed with third parties will be exclusive to Azure. Non-API products may be served on any cloud provider."
Now, does anyone think MIC customers want restricted, safe, aligned models? Is OpenAI going to provide turnkey solutions, unaligned models run in 'secure sandboxed cloud environments' in partnership with private weapons manufacturers and surveillance (data collection and storage/search) specialists?
This pattern is not historically unusual, turning to government subsidies and contracts to survive a lack of immediate commercial viability wouldn't be surprising. The question to ask Microsoft-OpenAI is what percentage of their estimated future revenue stream is going to come from MIC contracting including the public private grey area (that is, 'private customers' who are entirely state-funded, eg Palantir, so it's still government MIC one step removed).
If inference stays too expensive, then I don't know what happens, maybe a few people will pay for it.
Perhaps their big bet is that their partnership with Jony Ive will create the first post-phone hardware device that consumers attach themselves with, and then build an ecosystem around that?