Microsoft Works 'in Close Partnership' With OpenAI, Say Plaintiffs in Amended Complaint
A week after OpenAI CEO Sam Altman announced in a blog post that Microsoft will take a seat on the OpenAI board as a nonvoting observer, the Authors Guild and the 17 plaintiff authors who brought suit against numerous OpenAI entities and Microsoft filed an amended copyright infringement complaint Tuesday (docket 1:23-cv-08292) in U.S. District Court for Southern New York in Manhattan. Microsoft is a 49% shareholder in OpenAI.
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The amended complaint added a section under "Defendants," describing Microsoft’s operations. Microsoft's office and research lab in New York span “a wide variety of topics within theoretical and applied machine learning," it said. It highlighted Microsoft’s Azure project that “collaborated heavily with OpenAI” in its large language model (LLM) training. It said OpenAI conducts its generative AI training from a facility in Iowa and that the company has caused injury in New York, has employees in New York, works with Microsoft in New York and sells its products in New York.
Microsoft “works in close partnership” with OpenAI in connection with the LLMs at issue in the lawsuit, said the amended complaint, referencing an OpenAI LLM powering Microsoft’s Bing Chat through the Bing search engine. Microsoft has also integrated OpenAI’s LLMs into its sales and marketing software, coding tools, productivity software and cloud storage services, it said.
Microsoft’s $13 billion investment in OpenAI gives Microsoft “significant rights” in OpenAI, said the filing, quoting CEO Satya Nadella as telling tech journalist Kara Swisher in a November New York article, “We have all the IP rights and all the capability. If OpenAI disappeared tomorrow, I don’t want any customer of ours to be worried … because we have all of the rights to continue the innovation.” Nadella said Microsoft has “the people, we have the compute,we have the data, we have everything."
The amended complaint added that OpenAI’s GPT-4 is integrated into Microsoft's sales and marketing software, coding tools, productivity software and cloud storage services. Altman recently told employees that OpenAI is on track to generate $1.3 billion in revenue this year, the amended complaint said, citing an October article in The Information. Analysts estimate that Microsoft could earn more than $10 billion in annual revenue by 2026 “only from AI add-ons to its Microsoft 365 productivity software, ‘at the core’ of which lies OpenAI technology," said the amended complaint, citing a November CNBC post.
OpenAI’s training of its LLMs “could not have happened without Microsoft’s financial and technical support,” said the amended complaint. In 2020, Microsoft announced it had developed “one of the top five publicly disclosed supercomputers in the world” that had been built “in collaboration with and exclusively for OpenAI,” and “designed specifically to train that company’s AI models." This year, Nadella “reminded the world that the ‘heavy lifting’ for OpenAI’s LLM ‘training’ was done by Microsoft ‘compute infrastructure,’” said the amended complaint, citing CNBC.
The amended complaint added Microsoft to count three of plaintiffs’ claims, contributory copyright infringement. Microsoft and the other OpenAI defendants “materially contributed to and directly assisted in the direct infringement alleged in Count I by funding the direct infringement by way of capital, technology, personnel, and other resources; controlling or managing the property or other assets with which the direct infringement was accomplished; or providing business, legal, strategic, or operational guidance to accomplish the direct infringement,” it said.