Last week, OpenAI, one of the world’s leading AI tech companies, signed a $38 billion deal with Amazon for cloud computing services over the next seven years. Previously, OpenAI was in an exclusive trade agreement with Microsoft, which stipulated that it could only purchase software and server services from Microsoft. The original contract also gave Microsoft exclusive access to sell and use all OpenAI products until 2030 unless OpenAI declares it has reached Artificial General Intelligence (AGI), a standard that roughly equates to anything that a human brain can do.
As a result of complaints from OpenAI regarding a growing lack of power to satisfy consumer demands for AI, Microsoft renegotiated with OpenAI to allow both companies to engage in other contracts. Days later, OpenAI agreed to a deal with Amazon, granting them immediate access to Amazon Web Service datacenters and the Nvidia chips inside them. Additionally, OpenAI will also engage in several circular funding deals with a variety of companies, such as small tech companies and large investment banks. These include CoreWeave, AMD, the UAE, Nvidia, Oracle, and Softbank. Ultimately, these deals all aim to help OpenAI achieve its goal of developing 30 gigawatts of computing resources, enough for 25 million US homes.
Concerns have been raised about a growing financial bubble, a phenomenon where asset prices rise significantly above their actual price before a rapid collapse. These claims are founded on the reality of the vast amounts of funding going into AI tech and the so far unsustainable nature of the industry. And after all, AI is still a highly speculative technology that could take years to mature. OpenAI also has yet to turn profitable; its revenue of $13 billion, thus far coming from ChatGPT consumers, subscriptions to computer programming tools, and other tech, dwarfed by the $14 trillion it aims to invest in developing AI infrastructure. The burst of this bubble could have significant effects, including a market collapse, the loss of trillions of dollars in investments, and significant effects on companies involved.
Partly in response to these claims, OpenAI has recently transitioned to becoming a Public Benefit Corporation (PBC), a for-profit company that aims to benefit the public. In the past 18 months, Sam Altman and other company executives have attempted to transform the currently mixed nonprofit and for-profit company completely into the latter. The OpenAI Foundation, the nonprofit mainly controlling the company, will gain a $130 bn stake in the company, around 26%. Microsoft will also receive a 27% stake, with the remaining 47% of shares being held by former employees and investors. The OpenAI Foundation’s board of directors will now appoint members to the for-profit board and will be able to replace them at any time. Major tech companies have objected to this transition, including a lawsuit from Elon Musk and a letter sent by Meta to the Delaware attorney general last year.
How will these developments affect the future of OpenAI? Will they ultimately succeed, or will the bubble burst and cause global devastation? How will this impact the world and AI in the long run? Here at Concord Academy, we’ve seen AI affect our academic guidelines, influence the way teachers evaluate their students’ work, and raise conversations about the potential of AI. Audrey Mason ’28 described the situation: “As AI gets more and more intelligent and more and more capable, it makes more people feel inadequate, so they feel that they can’t match up to a computer and don’t need to learn skills.” From CA to the job market to the meaning of human creativity, AI is bound to have a significant impact on our future, and should be the focus for our view of the future.