Tech Newsround – China & OpenAI

USA vs China – Counterproductive.

• The move to block Manus from being acquired by Meta will ensure that Chinese IP that has already been created in China remains Chinese, but it is likely to also mean that IP that would have been Chinese will now be created overseas.
• Beijing’s order for Meta’s acquisition of Manus to be unwound is likely to be effective, as Manus’s founders have been summoned for a review (like Jack Ma) and have been banned from leaving the country.
• I presume this means that they will not be released until the deal has been unwound, which will be tricky for Meta as it has already started to integrate Manus into its systems.
• This is really the only way that China can enforce this ruling, as Manus shut up shop in China and decamped to Singapore in 2025 without seeking Chinese regulatory approval.
• This is already problematic as the amendments to the National Security Law of 2015 state that IP of national importance cannot leave China’s shores without approval.  
• The net result is that the idea of exporting IP from China by moving a company and its operations overseas is now a dead duck.
• The belief will be that this will keep Chinese IP at home, but I suspect it will drive more Chinese creators overseas.
• Many Chinese entrepreneurs who have a great idea will now keep it safely in their heads until they reach a foreign jurisdiction.
• Hence, what would have been Chinese IP will now be American, European or created in the Middle East.
• In my opinion, the best way to nurture entrepreneurs is to make China such an attractive place to start a company and reap the benefits from it that no one would ever want to go anywhere else.
• This does not seem to be the trajectory being taken, and it will be other jurisdictions that are the beneficiaries of Chinese creativity.

OpenAI and Microsoft – Free at last.

• OpenAI and Microsoft have tidied up the last loose ends of their relationship, putting an end to a messy divorce that could easily have resulted in a bitter lawsuit.
• OpenAI will now be free to sell its technology more widely, which paves the way for its deal with Amazon to come to fruition, while Microsoft has managed to get rid of the much-hated “AGI clause”
• This was a clause that allowed OpenAI’s board to unilaterally declare that AGI had been reached and cut off Microsoft’s access to further developments from OpenAI.
• This was a ridiculous clause that, if triggered, would have almost certainly resulted in a massive legal battle between the two.
• In effect, Microsoft becomes a shareholder of OpenAI and will receive a royalty on revenue until 2030, which is now subject to a cap.
• The main winner here is Microsoft because OpenAI was a gigantic risk that could have imploded at any moment, doing substantial damage to Microsoft.
• As one employee appropriately stated, “This saga had been going on for too long. We don’t have to worry about the constant drama at OpenAI any more, we are dissociated.” (reported by the FT).
• Building dependency on OpenAI is the single biggest mistake that Satya Nadella has made in his tenure, but this has now thankfully been addressed.
• Despite its privileged access to OpenAI, Microsoft’s AI is floundering as Claude is vastly superior when it comes to using AI in Microsoft Office.
• Mr Nadella now has only one headache to deal with, which gives him a better chance of fixing it.