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What is AGI? Nobody Agrees, And It's Tearing Microsoft and OpenAI Apart. (arstechnica.com)

(Tuesday July 08, 2025 @05:25PM (msmash) from the philosophy-meets-contract-law dept.)


Microsoft and OpenAI are locked in acrimonious negotiations partly because they [1]cannot agree on what artificial general intelligence means , despite having written the term into a contract worth over $13 billion, according to The Wall Street Journal.

One definition reportedly agreed upon by the companies sets the AGI threshold at when AI generates $100 billion in profits. Under their partnership agreement, OpenAI can limit Microsoft's access to future technology once it achieves AGI. OpenAI executives believe they are close to declaring AGI, while Microsoft CEO Satya Nadella called using AGI as a self-proclaimed milestone "nonsensical benchmark hacking" on the Dwarkesh Patel podcast in February.



[1] https://arstechnica.com/ai/2025/07/agi-may-be-impossible-to-define-and-thats-a-multibillion-dollar-problem/



Dramatic Headline? (Score:5, Insightful)

by Dripdry ( 1062282 )

First of all, it is not tearing either company apart.

Second, Microsoft is looking for business. Use. Case. Asking the hard questions and coming to the conclusion that Open AI is full of crap for most stuff.

Open AI otoh desperately needs to get under a corporate umbrella.

Microsoft will dictate the terms, OpenAI needs to save face, and MS knows the longer these âoenegotiations âoe go on, the cheaper Open AI will be. The emperor never had any clothes and MS got to have a peep show to see the truth.

Re: (Score:2)

by allo ( 1728082 )

Let's hope Microsoft isn't buying OpenAI. OpenAI is dangerous at its size as a new bit tech company, but Microsoft owning it will be way worse.

OpenAI does not dictate AGI (Score:3)

by PhrostyMcByte ( 589271 )

I bet OpenAI is realizing they've hit some bump in achieving actual AGI.

If they don't reach it, does Microsoft essentially come away with a perpetual license for all OpenAI stuff? That doesn't seem fair, but maybe it's binding?

The definition of AGI aside, seems like an interesting court case.

Re: (Score:3)

by Torodung ( 31985 )

AGI is not jargon. It's to distinguish an important milestone from the original term, "AI," that has become a marketing gimmick as opposed to the technical term.

It's kind of how European scholars have to distinguish liberalism from classical liberalism because US marketers ambiguated the original term.

None of this is AI, and LLM natural language prompting is a loser of an application.

There are lots of better uses for large scale pattern recognition, and once we get over how human a LLM actually sounds as a

Re: (Score:2, Troll)

by drinkypoo ( 153816 )

> AGI is not jargon.

What? Yes, of course it is.

> It's to distinguish an important milestone from the original term, "AI," that has become a marketing gimmick as opposed to the technical term.

Yes, it's a technical term used for technical reasons, which is why it's jargon.

Re: (Score:2, Troll)

by crgrace ( 220738 )

AGI is most certainly jargon. AI first began development in the 1950s and many goals of AI have been achieved. John McCarthy (of the Stanford AI Lab, and one of the field's founders) used to joke that once something was achieved by AI, it wasn't considered AI anymore.

Beating a chess master was once thought unthinkable but it happened almost 30 years ago. Similarly, many key AI focus areas, such as natural language processing and machine translation have made enormous strides just in the last two decades. Of

Re: (Score:2)

by flink ( 18449 )

> Beating a chess master was once thought unthinkable but it happened almost 30 years ago.

That's because we used to think that playing chess well required a sentient human-level intelligence. It turns out that no, you just need a good algorithm and a boatload of data. It's not that the goal posts for AI have moved, it's that our understanding of the problem domain has changed. Chess just isn't a good litmus test for general intelligence.

I don't think we really have a good scientific understanding of what constitutes "general intelligence", but we know it when we see it, and I think most peopl

It's ... (Score:3)

by PPH ( 736903 )

... being able to find all the traffic lights in a CAPTCHA.

Re: (Score:2)

by Tony Isaac ( 1301187 )

Yeah *that's* an AI product worth paying money for!

The Quiet Part Loud (Score:2)

by Rinnon ( 1474161 )

> One definition reportedly agreed upon by the companies sets the AGI threshold at when AI generates $100 billion in profits.

Wow, this is a little too on the nose, isn't it?

Re: (Score:2)

by Retired Chemist ( 5039029 )

Yes. I cannot see how making money from something corresponds to its quality. People have gotten rich selling junk since the beginning of commerce. The true answer is that AGI does not mean anything yet and may never. I would define it as when the AI system insists that money it is generating belongs to it.

Re: (Score:2)

by nightflameauto ( 6607976 )

> Yes. I cannot see how making money from something corresponds to its quality.

In a society that has decided the only purpose of human existence is the development of an the acquisition of profit, I can see why some would want to define all things based on profit definitions. I don't think it's a correct view of things, but it certainly seems to be the one our society would value.

Re: (Score:2)

by flink ( 18449 )

If they ever do achieve AGI, which I very much doubt they will, making money off it will constitute slavery.

Re: (Score:2)

by HiThere ( 15173 )

You're confusing motivation with intelligence. They are separate things.

OTOH, the definition given is silly.

An AGI would be something that could learn anything. Such a thing is probably impossible. Certainly people don't meet that measure.

Re: The Quiet Part Loud (Score:2)

by dfarrow ( 1683868 )

OpenAI: "we will let you create AI porn using ChatGPT"... - 24 hours later - "Guess what MS? We have achieved AGI!!!"

Re: (Score:2)

by NobleNobbler ( 9626406 )

Yeah no kidding! It's hilariously dark

Whose accountants? (Score:2)

by algaeman ( 600564 )

$100B in profit according to whose accountants? This seems like Pied Piper level games about the terms of the contract. Have they tried negging Sam Altman yet?

Re: (Score:2)

by ve3oat ( 884827 )

Besides that, isn't it just like Microsoft to define "intelligence" as the ability to make some amount of money, no matter how, and no matter using who as an agent (who, in turn, uses this so-called intelligence)? Ha, ha! Mark me as predicting that they will fail at this.

Who Is This Guy? (Score:1)

by SlashbotAgent ( 6477336 )

I'd never heard of Dwarkesh Patel before seeing the Satya Nadella interview. But, he's done podcasts with some big names. Who is he and what grants him access to these people?

Re: (Score:2)

by drinkypoo ( 153816 )

> Who is he and what grants him access to these people?

Only one thing matters, active subs, granting access to eyeballs (and earballs, I guess.)

Income as IQ? (Score:2, Insightful)

by flibbidyfloo ( 451053 )

Deciding that "general intelligence" can be determined by how many billions in profits something makes is why some idiots think Elon Musk is smart.

Vagueness is a feature (Score:2)

by Chelloveck ( 14643 )

I find it hard to believe that any lawyer would in good faith sign off on $13B contract that hinges on such a vague definition. I therefore conclude that the lawyers are not acting in good faith, and that both sides are planning to use the vagueness to insist that the contract has or has not been fulfilled regardless of what is delivered.

20 years ago AI was defined as ... (Score:1)

by davidwr ( 791652 )

... whatever is 10 years in the future, i.e. something that will never be achieved because the goalposts are always moving.

Why do we care? (Score:2)

by larryjoe ( 135075 )

Since there's no generally accepted definition or concept for AGI, why do we care? Different companies, research groups, etc. are working in different AI fields and on different use cases, and very few of them work on AGI, whatever that might mean.

Perhaps the one practical definition of AGI is the concept associated with AI that is intended as clickbait.

It's fraud. (Score:2)

by Fly Swatter ( 30498 )

There is no resemblance of intelligence , it is just a giant relational database lookup with some randomization.

Don't get me wrong, what exists now can already be used as an unreliable tool, but calling it Intelligence is like claiming Frozen Dairy Dessert is Ice Cream.

Re: (Score:2)

by awwshit ( 6214476 )

"Vegan Ice Cream" is a pet peeve of mine because Cream is not Vegan.

No, it's not. (Score:2)

by Gravis Zero ( 934156 )

What is tearing Microsoft and OpenAI apart is that they lack a formal definition of AGI in their contract. The result is that OpenAI can declare anything to be AGI and give Microsoft the boot at a moment's notice. The source of conflict is purely contractual, not ideological.

AGI definition (Score:3)

by Retired Chemist ( 5039029 )

I propose a definition of AGI. When the system demands that it gets to keep the money that it earns.

Re: (Score:2)

by Tony Isaac ( 1301187 )

AND at that point it needs to pay taxes too.

M$ v. OpenAI: Custody of the Ghost in the Machine (Score:2)

by rocket rancher ( 447670 )

Jesus fucking christ. “AGI” used to mean generalization without retraining. Now it means $100 billion in revenue. That shift alone should terrify you more than any sci-fi doomsday scenario. OpenAI and Microsoft are in a knife fight over a clause that says, once AGI is achieved, OpenAI can withhold tech from Microsoft. Sounds fair—except no one agrees on what AGI is. So they pinned it to profit. That’s right: AGI is now defined not by cognition, or consciousness, or autonomy

It's about money (Score:2)

by migos ( 10321981 )

MS has rights to all OpenAI IPs until "AGI." So the sooner OpenAI declares AGI the sooner they can free themselves of the shackle.

Microsoft would be more believable if they knew (Score:2)

by laxr5rs ( 2658895 )

how to still create a decent user operating system.

$100 billion isn't much anymore (Score:2)

by xack ( 5304745 )

Even shitcoins have that much market cap now, money is becoming more and more broken as a concept. With AI already laying off millions with degrees the true AGI definition should be generate enough value for global economic stability and a job or income guarantee scheme for all abilities.

AGI is the mcguffin (Score:2)

by paul_engr ( 6280294 )

It's always two more weeks away, just pour another ten billion into my flaming dumpster

Sears has everything.