Doesn’t that go against Microsoft’s fiduciary responsibilities to shareholders to maximize profits? At the very least, it would be contentious among the shareholders. Leaving money on the table? This is the kind of thing would need a very brave (or cavalier) CEO to risk a personal lawsuit.
But Microsoft does. And those shareholders would want to know why money that could be going to them is frittered away on a startup that is constitutionally set up to leave money on the table.
I mean Microsoft invested in OpenAI back when they were still claiming to stay non-profit. There are ways such as just treating them as an exclusive subcontractor in order to keep your main business. Microsoft is not a chip company afterall but needs them to have product at prices people will pay.
In that case they would be locking down their subsidiary even further to just one client. I guess it all comes down to the plausibility of their argument for making this investment, rather than, say increasing dividends or ploughing that money back into other investments for the business.
I guess they were able to justify the OpenAI investment along these lines. If I could hazard a guess, it would be something along the lines of:
This is a new market. We need to get in at the ground floor.
I suspect, OpenAI presented itself as a turn key solution to get a foothold in this brave new world and maybe steal a march on Google.
Doesn’t that go against Microsoft’s fiduciary responsibilities to shareholders to maximize profits? At the very least, it would be contentious among the shareholders. Leaving money on the table? This is the kind of thing would need a very brave (or cavalier) CEO to risk a personal lawsuit.
You don’t have shareholders until you ipo. Startups have not ipoed.
But Microsoft does. And those shareholders would want to know why money that could be going to them is frittered away on a startup that is constitutionally set up to leave money on the table.
I mean Microsoft invested in OpenAI back when they were still claiming to stay non-profit. There are ways such as just treating them as an exclusive subcontractor in order to keep your main business. Microsoft is not a chip company afterall but needs them to have product at prices people will pay.
In that case they would be locking down their subsidiary even further to just one client. I guess it all comes down to the plausibility of their argument for making this investment, rather than, say increasing dividends or ploughing that money back into other investments for the business. I guess they were able to justify the OpenAI investment along these lines. If I could hazard a guess, it would be something along the lines of:
I suspect, OpenAI presented itself as a turn key solution to get a foothold in this brave new world and maybe steal a march on Google.