Legally, Microsoft clearly knew they were stepping into some whacky corporate structure.
If their profits are capped and they have no rights, that's what it is.
You think they're just going to complain their way out of it in court?
I'm not convinced.
Their stock is probably up $250B because of this investment...
The idea they're getting screwed is interesting.
Microsoft is a lot of things - stupid and incompetent are neither of those things.
They want to have their cake and eat it, too.
When does controversial corporate stuff not result in some kind of legal action?
It doesn’t actually matter what the situation is, or if it makes sense… you just take your pack of lawyers and you point them at the enemy and tell them to do their jobs.
I mean, have you met Microsoft?
Yeah. They have a lot of lawyers.
I think you can take it as a given this will have some kind of response… it’ll just be a matter of them trying to judge the benefits vs. the cost of it.
Ie. it is not that they can’t lodge legal action, because, trust me, they can… but they, I guess, will wait and see what Sam does, and try to decide if/who they want to back before they do anything.
Truth. And further leverage depending on how much of the $10B in cash or Azure equivalents MSFT has already delivered.
I’ve got some experience in not for profit boards and for profit boards. For profit boards serve shareholders. Not for profit boards are often the ultimate authority. There are no shareholders. They may have members who fill that role, or they may not. They can also be essentially self-sustaining, with only board members electing new board members.
Unless given some authority by contract Microsoft likely has no ability to do anything with their board.
Also, "hiring the best lawyers in the world" is similar to the "nine women can't give birth to one baby in one month", that is, from a certain point on both sides can "hire the best lawyers in the world", or pretty much close to it, an order of magnitude (or two or three, like MS has over whoever will stand behind the OpenAI's board members in helping them with money) bigger scale doesn't necessarily guarantee the expected outcome.
If one company could sue another smaller company out of business at will, there would only be one company.
It does happen that companies go bankrupt fighting invalid lawsuits, no doubt, but it’s rare and it’s almost never a company that just built the most talked about product of the decade and raised an 11 digit war chest.
It will be hilarious if they sold all their IP to Google or Amazon.
But it's more likely in such a case, they will just open source / toss into public domain all their IP, shut their doors, and start a new non-profit which MS has no good reason to sue.
Or that if Microsoft did sue (perhaps because something that happens in the near future violates their contracts) OpenAi just spends like 1% of their cash on legal fees. $100 million in legal fees is not an existential risk to companies who recently raised $10b.
That just isn’t how the legal system works. You can sue a small business into bankruptcy because a few million in legal fees is enough.
I think that's basically literally their charter?
Depends on the contract. If the contract says nothing about OpenAI having to work on LLMs ... then there is nothing MS can do if they stopped all LLM work and worked on something else.