OpenAI to cut Microsoft's revenue amid strategic restructuring shift: Report
According to a report, OpenAI has informed investors that it will cut Microsoft's revenue share from 20% to around 10% by the end of this decade.
- May 7, 2025,
- Updated May 7, 2025 12:25 PM IST
OpenAI plans to significantly reduce the share of revenue it provides to Microsoft as part of a broader strategic pivot, including a scale-back of its internal restructuring plans. According to a report by The Information, the ChatGPT-maker has informed investors that it will cut Microsoft's revenue share from 20% to around 10% by the end of this decade.
The move comes as OpenAI reverses course on a previously planned overhaul that would have increased CEO Sam Altman’s control over the organisation. Instead, its nonprofit parent will retain governance authority, effectively limiting Altman’s influence.
Microsoft, OpenAI’s largest backer, has reportedly invested $13.75 billion into the AI firm, including a landmark $10 billion deal announced in early 2023. Under the current agreement, which runs through 2030, OpenAI shares 20% of its revenue with Microsoft. However, internal financial documents and investor briefings cited in the report indicate that OpenAI expects to halve that figure, offering just 10% of revenues to Microsoft and other commercial partners by 2030.
Despite the shift, both companies have reaffirmed their commitment to the ongoing partnership. Microsoft, which relies on OpenAI’s models to power products like Copilot and hosts OpenAI’s APIs exclusively on Azure, said the core elements of the collaboration will continue through the life of the contract. “The key elements of our partnership remain in place for the duration of our contract through 2030, with our access to OpenAI’s IP, our revenue sharing arrangements and our exclusivity on OpenAI’s APIs all continuing forward," Microsoft said in a statement.
In January, Microsoft also revised aspects of its agreement with OpenAI following the announcement of a $500 billion AI data centre initiative in partnership with Oracle and Japan’s SoftBank Group. The tech giant is said to be keen on maintaining access to OpenAI’s technology well beyond the current contract period.
"We continue to work closely with Microsoft, and look forward to finalising the details of this recapitalisation in the near future," an OpenAI spokesperson told The Information.
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OpenAI plans to significantly reduce the share of revenue it provides to Microsoft as part of a broader strategic pivot, including a scale-back of its internal restructuring plans. According to a report by The Information, the ChatGPT-maker has informed investors that it will cut Microsoft's revenue share from 20% to around 10% by the end of this decade.
The move comes as OpenAI reverses course on a previously planned overhaul that would have increased CEO Sam Altman’s control over the organisation. Instead, its nonprofit parent will retain governance authority, effectively limiting Altman’s influence.
Microsoft, OpenAI’s largest backer, has reportedly invested $13.75 billion into the AI firm, including a landmark $10 billion deal announced in early 2023. Under the current agreement, which runs through 2030, OpenAI shares 20% of its revenue with Microsoft. However, internal financial documents and investor briefings cited in the report indicate that OpenAI expects to halve that figure, offering just 10% of revenues to Microsoft and other commercial partners by 2030.
Despite the shift, both companies have reaffirmed their commitment to the ongoing partnership. Microsoft, which relies on OpenAI’s models to power products like Copilot and hosts OpenAI’s APIs exclusively on Azure, said the core elements of the collaboration will continue through the life of the contract. “The key elements of our partnership remain in place for the duration of our contract through 2030, with our access to OpenAI’s IP, our revenue sharing arrangements and our exclusivity on OpenAI’s APIs all continuing forward," Microsoft said in a statement.
In January, Microsoft also revised aspects of its agreement with OpenAI following the announcement of a $500 billion AI data centre initiative in partnership with Oracle and Japan’s SoftBank Group. The tech giant is said to be keen on maintaining access to OpenAI’s technology well beyond the current contract period.
"We continue to work closely with Microsoft, and look forward to finalising the details of this recapitalisation in the near future," an OpenAI spokesperson told The Information.
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