Analysts at Macquarie provided their thoughts on Elon Musk suing OpenAI in a note Monday, but the firm said it does not see a near-term risk to Microsoft's (NASDAQ:MSFT) commercialization of GPT-3.5 or GPT-4.
This is because Microsoft's agreement with OpenAI provides a broad IP license for OpenAI's models up to what OpenAI's board determines to be artificial general intelligence (AGI), according to the firm.
"Nevertheless, these lawsuits add a measure of near-term risk to Microsoft's OpenAI services and Copilot products in the event courts rule against OpenAI or Microsoft," they added.
Meanwhile, the firm also weighed in on the NYTime's case against OpenAI, stating it will determine how the US applies copyright law to generative AI, with impacts at Microsoft and beyond if there is an adverse outcome.
"We think Elon's case may determine how OpenAI can engage in commercial activity as a non-profit with for-profit subsidiaries and if Microsoft's licensing agreement stands," added the firm. "We expect these lawsuits to take time to play out and that each must be watched closely."
"OpenAI remains the uncontested leader in AI but, regardless of these cases, we have seen the performance gap between GPT-4 and other models narrow (but certainly not close) throughout 2023," said Macquarie. "We believe Microsoft can build strong Copilot software using non-OpenAI models — be those open-source or other commercial partnerships — and we think collections of smaller, domain-specific models can be successfully commercialized for Copilots."