Tracking the history of the now-deceased OpenAI Microsoft AGI clause

2026-04-27 · Source: Simon Willison's Weblog · Field: Legal & Regulatory — Corporate Law & Business Legal Services, Intellectual Property & Patents, Compliance & Risk Management · Depth: Intermediate, short

Summary

On April 27th, 2026, the long-standing clause in the Microsoft-OpenAI partnership agreement, which would nullify Microsoft's commercial IP rights upon the achievement of Artificial General Intelligence (AGI), appears to have been removed. This clause's evolution began with a July 2019 partnership where Microsoft became the preferred commercialization partner for "pre-AGI technologies." OpenAI's initial AGI definition from April 2018 described it as "highly autonomous systems that outperform humans at most economically valuable work." By December 2024, AGI was reportedly defined financially, tied to OpenAI's systems generating $100 billion in profit. In October 2025, the declaration process shifted to an independent expert panel. A February 2026 joint statement affirmed the AGI definition and processes were unchanged. However, the latest April 2026 update states Microsoft's IP license is now non-exclusive through 2032, and revenue share payments from OpenAI to Microsoft continue through 2030 "independent of OpenAI’s technology progress," signaling the clause's termination.

Key takeaway

For CTOs and legal teams drafting technology partnership agreements, your contracts must anticipate and clearly define triggers for significant changes in IP rights or commercial terms. The removal of OpenAI's AGI clause highlights the difficulty of using abstract future concepts like AGI as contractual milestones. Ensure your agreements include concrete, measurable metrics or a robust, independent verification process to avoid ambiguity and potential disputes as technology evolves.

Key insights

The AGI clause in the Microsoft-OpenAI partnership, which tied IP rights to AGI achievement, has been removed.

Principles

• Partnership terms evolve with technological progress.
• Defining AGI concretely is challenging for legal agreements.

In practice

• Review partnership agreements for evolving clauses.
• Ensure clear, measurable definitions for contractual triggers.

Topics

• OpenAI Microsoft Partnership
• Artificial General Intelligence
• Commercial IP Rights
• AGI Definition Evolution
• Revenue Share Agreements

Best for: Investor, CTO, VP of Engineering/Data, Legal Professional, Executive, Director of AI/ML

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Editorial summary, takeaway, and curation by AIssential. Original article published by Simon Willison's Weblog.