OpenAI Finally Goes Full Capitalist - September 15, 2025

OpenAI just pulled off one of the slickest corporate maneuvers in tech history. They took Microsoft's $13 billion and basically said "thanks for the cash, now fuck off so we can compete with you." Microsoft got played and the negotiations were a complete shitshow.

Here's what actually happened: OpenAI was burning through cash faster than a crypto startup in 2021. Their dual nonprofit/for-profit structure was a clusterfuck that made basic business decisions impossible. Microsoft had them by the balls with their Azure infrastructure deal, but OpenAI was shopping around for other cloud providers anyway.

The Public Benefit Corporation bullshit is just lawyer speak for "we want to make money but still sound like we care about humanity." Same playbook every tech company uses when they go from "changing the world" to maximizing shareholder value.

The real story: Sam Altman got fired by his own board in November 2023, then got rehired after employees threatened to quit en masse. That showed everyone who actually had power at OpenAI - the for-profit side with all the talent and IP. The nonprofit board was just dead weight at that point.

Microsoft thought they were buying control of the AI future for $13 billion. Instead they funded their biggest competitor. OpenAI's already signed that massive Oracle deal - something like $300 billion over 5 years, though nobody knows the actual terms. Classic Silicon Valley move: take the money, then go compete with your sugar daddy.

The $500 billion valuation is completely insane. That's more than Tesla, and Tesla actually builds fucking cars. OpenAI burns billions training models that cost pennies to copy - my former colleague at DeepMind recreated 85% of GPT-4's performance using Llama 2 as a base and maybe $47k in H100 time over a weekend. But in this market, investors are throwing money at anything with "AI" in the name, so maybe they can actually pull off the IPO.

Bottom line: OpenAI figured out how to get rich while pretending to save humanity. Microsoft got schooled by a 39-year-old who previously got fired from Y Combinator. And now we all get to watch what happens when a company worth half a trillion dollars is run by people who think AGI is coming next year.

Microsoft's giving up control but keeping the money flow - clever bastards. They figured out that owning OpenAI outright would just make them a bigger target for regulators, while keeping them as a customer means steady revenue without the legal headaches.

Here's the real play: OpenAI still needs Azure to run their shit. Those GPT-4 training runs burn through thousands of H100 GPUs for weeks at a time. That's hundreds of millions in cloud bills every quarter, and Microsoft gets paid whether OpenAI succeeds or fails spectacularly.

But OpenAI's already shopping around. That Oracle deal everyone's talking about? That's OpenAI telling Microsoft "we don't need you anymore" while still being locked into Azure contracts through like 2030. Smart negotiating, but Microsoft's lawyers aren't stupid either.

The stock bump after this announcement shows Wall Street gets it - Microsoft trades away some control for guaranteed revenue plus regulatory breathing room. The FTC was all over their asses about the OpenAI partnership. Now they can claim it's just a vendor relationship.

What actually changes: Microsoft loses veto power over OpenAI's stupid decisions but keeps getting paid every time someone uses ChatGPT. That Oracle infrastructure deal? Probably won't happen until the Azure contracts expire, and by then Microsoft might have their own models anyway.

The irony is beautiful - Microsoft funded OpenAI to compete with Google, then OpenAI got big enough to compete with Microsoft. Now Microsoft's stuck paying for their own competition while pretending this was the plan all along.

Bottom line: This is Microsoft admitting they can't control OpenAI anymore, so they might as well get paid to host their infrastructure. It's like renting your garage to someone who's stealing your customers, except the rent is really, really good.