October 28 in business history: half of one per cent, a fixed price, and a clause that defines AGI
Three 28 October documents — the Volstead Act's half-of-one-per-cent line in 1919, NASA's fixed-price cargo contract in 2014, and OpenAI's AGI trigger in 2025 — and what each one quietly decided about who paid.
Three 28 Octobers turned on a sentence in a document.
A statute in 1919 fixed the strength at which a drink became illegal. A cargo contract in 2014 fixed who paid when a rocket fell back onto its pad. A partnership agreement in 2025 rewrote the test for when a laboratory's founding mission had been accomplished.
In each case the strategy was unremarkable. The wording decided the bill.
The half of one per cent that redrew an industry
Congress passed the Volstead Act over President Woodrow Wilson's veto on 28 October 1919. The Senate voted 65 to 20 to override, after the House had voted to do the same. 1
The House had passed the bill in July, 287 to 100, with the Republican majority behind it. 2
The Act's first job was a definition. An intoxicating beverage was anything containing more than one half of one percent alcohol. 1
The Act made manufacture, sale, barter, transport, import, export, delivery, furnishing and possession federal offences. 1
Below the line, a business could still be run.
About 1,000 breweries were operating in the United States in 1919. 3
Roughly 200 kept working through the dry years. 3 They brewed a full beer and boiled the alcohol out at the end, then sold what was left as near beer. 3
Their cold stores and delivery trucks carried the substitutes. Pabst made processed cheese and sold it as Pabst-ett. Yuengling and Anheuser-Busch made ice cream. Others made root beer, ginger ale and malt syrup, a baking ingredient that doubled as the main input for a home brew. 3
The wine trade found a purer version of the same move. Fruit Industries sold Vine-Glo, a brick of grape concentrate whose label carried a warning describing exactly what would happen if the juice were left to ferment. About one million gallons went out before a federal court ruling ended the product in 1931. 4
Beer at 3.2 per cent returned on 7 April 1933, in 20 states at first, and national Prohibition ended on 5 December. 3
The count that shaped the industry came after repeal. About 200 breweries were selling beer on the first legal day. 3 607 had sold by the end of 1933. 3
Of those 607, 232 had operated at some point during Prohibition, and 172 of them had made near beer. Only 54 were new companies. 3 The plants that came back fastest were the ones that had kept a legal product moving through them.
Decision mirror: Brussels moved a line of the same kind on 16 December 2025. 5
The European Commission's automotive package cut the 2035 requirement for new cars and vans from a 100 per cent tailpipe reduction to 90 per cent. 5 The remaining tenth can be offset with low-carbon steel made in the European Union, or with e-fuels and biofuels. 5
Every product plan written against 100 per cent now has a second route to compliance, and that route runs through steel suppliers and fuel makers rather than battery plants.
The fixed price that bought tonnage
Orbital Sciences launched its third cargo run to the International Space Station at 6:22 p.m. local time on 28 October 2014, from pad 0A at Wallops Island, Virginia. 6
The Antares cleared the tower and failed about six seconds later. 7 The range safety officer destroyed it before it reached the ground. 7
The Cygnus capsule carried about 2,293 kilograms of supplies and experiments. 8
Orbital's Frank Culbertson, a vice president and former astronaut, put the rocket and spacecraft together at about $200 million. 9 He described the insurance cover as some, and gave no amount. 9
The first stage ran on two AJ-26 engines. Each began as a Soviet NK-33, built in the late 1960s and early 1970s for the N1 moon rocket. 7
Aerojet bought 43 of them in the 1990s and converted 20 for Antares. 7 The conversion added gimballing and American electronics, and qualified the engines to fire twice as long at 108 per cent of their original thrust. 7
One of them failed on a test stand at Stennis in May 2014, five months before the launch. 7
The investigation traced the loss to the liquid-oxygen turbopump and could not settle on a single root cause. 6
The contract had already decided the arithmetic. NASA's $1.9 billion award bought 18.6 tonnes of cargo over eight flights by the end of 2016, at a fixed price. 8
The award specified tonnage by a date. The rockets were Orbital's problem. A failed mission cost the company the 20 per cent cargo-delivery milestone. 8
Beyond that, the contract sheet read in the customer's favour. NASA asked for no re-flight, held Orbital liable for none of the destroyed cargo, and could not recover milestone payments it had already made. 8
The audit said so directly: the contract placed much of the risk of an unsuccessful mission on NASA. 8
So the customer bought a replacement route. NASA approved a return to flight in January 2015 with four missions instead of five, two of them on another company's Atlas V. 8
The re-pricing cost the agency $65 million more than its original per-kilogram terms implied, against up to $84 million the audit said it could have saved. 8 Five million dollars of NASA money also went into repairing the launch pad, because the insurance and self-insurance arrangements had been left unclear. 8
Pad 0A reopened on 6 October 2015 after about $15 million of repairs. 7 The rebuilt Antares, with Russian RD-181 engines, flew on 17 October 2016. 7
Decision mirror: NASA still buys cargo this way. On 27 March 2026 it awarded Intuitive Machines $180.4 million to land seven payloads near the lunar south pole in 2030, the company's fifth task order under Commercial Lunar Payload Services. 10
The price is fixed at award. What a failure costs each side depends on the milestone and liability sentences that govern a lost flight.
The clause that says when the mission is complete
OpenAI finished its recapitalization on 28 October 2025. 11
The nonprofit, renamed the OpenAI Foundation, kept control of the business, which became a public benefit corporation called OpenAI Group PBC. 11
The ownership split was the day's news. The Foundation holds 26 per cent of the for-profit, worth about $130 billion at the time. 12
Current and former employees and investors hold 47 per cent. 12
Microsoft holds about 27 per cent on an as-converted diluted basis, worth about $135 billion, on more than $13 billion invested since 2019. 12 The company was valued at $500 billion. 12
The clause that had governed the partnership since 2019 was the one about AGI. Microsoft's exclusive rights to OpenAI's models were tied to a declaration that AGI had arrived, and that declaration ended them. 13
The new agreement kept the trigger and changed the referee. Microsoft's intellectual property rights now run to 2032 and cover models built after AGI as well. 13
A declaration of AGI is verified by an independent expert panel. 13 Microsoft also gave up its right of first refusal to be OpenAI's compute provider, and OpenAI committed to buy $250 billion of additional Azure services. 13
Two state regulators shaped the final text. OpenAI said the recapitalization closed after nearly a year of talks with the offices of the California and Delaware attorneys general, and that several terms changed as a result. 11
A year on, the structure has a market price. OpenAI closed a $122 billion round on 31 March 2026 at an $852 billion post-money valuation, with Amazon, Nvidia and SoftBank anchoring and Microsoft taking part. 14
Decision mirror: A second laboratory answered the same governance question differently. Anthropic is a public benefit corporation whose board is elected by its stockholders and by a Long-Term Benefit Trust, whose trustees include Ben Bernanke. 15
On 28 May 2026 Anthropic raised $65 billion at a $965 billion post-money valuation. 16
The market has now priced the trust version above the foundation version.
Three questions for the day
- Which number in your plan is a definition written by a regulator, and what would your product line look like if that line moved by ten points?
- On a fixed-price contract, which milestone do you forfeit when the work fails, and who pays for the replacement?
- Which trigger in your agreements is still a declaration by the party that benefits from it?
References
- 1
- 2The Volstead Act
history.house.gov
- 3The Entrepreneurial Response to Beer Legalization in 1933
lirias.kuleuven.be
- 4Vine-Glo
en.wikipedia.org
- 5Automotive package
transport.ec.europa.eu
- 6Cygnus Orb-3
en.wikipedia.org
- 7Antares (rocket)
en.wikipedia.org
- 8
- 9Orbital Sciences Corporation's Antares Rocket Crashes Moments After Liftoff
spacepolicyonline.com
- 10
- 11Built to benefit everyone
openai.com
- 12
- 13The next chapter of the Microsoft–OpenAI partnership
blogs.microsoft.com
- 14
- 15Company
anthropic.com
- 16
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