Key Takeaways
- OpenAI is reportedly aiming to significantly decrease Microsoft’s share of its revenue by the end of this decade.
- This development comes after OpenAI decided its non-profit arm would continue to control its for-profit operations.
- Financial projections suggest Microsoft’s revenue portion from OpenAI could be cut by at least half.
- The relationship between the two tech giants seems to be evolving, despite their major partnership.
It appears OpenAI is looking to reshape its financial ties with Microsoft, its largest investor. The AI firm, known for ChatGPT, reportedly plans to substantially reduce Microsoft’s slice of its revenue pie.
This move follows an earlier announcement by OpenAI’s CEO that the company would not transition into a typical for-profit business. Instead, OpenAI will maintain a structure where its original non-profit entity oversees its for-profit division.
According to a report from The Information, financial forecasts shared with investors indicate Microsoft’s revenue share from OpenAI’s business might drop by at least 50% before 2030.
Microsoft has a multi-billion dollar partnership with OpenAI, entitling it to a share of OpenAI’s revenue. This arrangement has been in place for some time.
However, recent events suggest the once very close relationship might be experiencing some changes. OpenAI’s unveiling of its “Stargate” project, aimed at building U.S. data centers, reportedly caused concern among investors. This move also meant Microsoft was no longer OpenAI’s exclusive cloud provider, though it still has right of first refusal.
The Stargate initiative led Microsoft to adjust its partnership agreement to safeguard its investment, even as the company stated key original terms would remain. OpenAI also voiced commitment to their collaboration, telling The Information, “We continue to work closely with Microsoft, and look forward to finalizing the details of this recapitalization in the near future.”
Despite these assurances, there are signs Microsoft might be taking a less central role. Salesforce CEO Marc Benioff even predicted Microsoft might eventually stop using OpenAI’s technology. This idea gained traction with reports that Microsoft is developing its own AI models.
Further reports indicated Microsoft might be backing away from supporting some of OpenAI’s extensive data center needs. However, OpenAI CEO Sam Altman has stated the AI firm is no longer “compute-constrained,” implying it has sufficient resources to power its advanced AI development.
