OpenAI caps Microsoft revenue at $38B

OpenAI’s revised deal with Microsoft puts a hard ceiling on one of the most consequential payment streams in artificial intelligence. Reuters reported on May 11, citing a person with knowledge of the arrangement, that OpenAI agreed to cap total revenue-sharing payments to Microsoft at $38 billion. The change follows an amended partnership the companies announced on April 27, when Microsoft said OpenAI’s payments would continue through 2030 at the same percentage as before, but “subject to a total cap.” The cap matters because the original public language around the partnership did not disclose a fixed dollar limit. Microsoft and OpenAI said in April that Microsoft would remain OpenAI’s primary cloud partner, that OpenAI could serve products across any cloud provider, and that Microsoft’s license to OpenAI intellectual property would become non-exclusive through 2032. The companies also said Microsoft would no longer pay a revenue share to OpenAI, while OpenAI would continue paying Microsoft through 2030. (money.usnews.com) ### Where did the $38 billion figure come from? Reuters reported on May 11 that The Information first disclosed the $38 billion ceiling, citing a person with knowledge of the arrangement. Reuters said it could not immediately verify the report independently, and neither OpenAI nor Microsoft immediately responded to its requests for comment. (blogs.microsoft.com) Microsoft’s own April 27 post confirmed the structure, if not the number. The company said the revenue-share payments from OpenAI would continue through 2030, remain at the same percentage, and be constrained by an overall cap. OpenAI published the same outline in its own post that day. ### What exactly changed in the Microsoft-OpenAI relationship? (money.usnews.com) April 27 was the key reset date. Microsoft said the amended agreement made its license to OpenAI models and products non-exclusive through 2032, ended Microsoft’s own revenue-share payments to OpenAI, and allowed OpenAI to serve all of its products to customers across any cloud provider. Azure remains OpenAI’s primary cloud partner, and OpenAI products will ship first on Azure unless Microsoft cannot or chooses not to support the required capabilities, the companies said. (blogs.microsoft.com) Those terms loosen a relationship that had made Microsoft the central commercial channel for OpenAI’s models. Reuters said the renegotiation created room for OpenAI to pursue partnerships with other large technology companies, including Amazon and Google. ### Why did this surface during the Musk trial? (blogs.microsoft.com) The New York Times reported on May 14 that the cap surfaced in coverage of closing arguments in Elon Musk’s lawsuit over OpenAI’s conversion and control. The Times said Microsoft Chief Executive Satya Nadella testified that Microsoft had provided roughly $10 billion to OpenAI in 2022 and 2023, a figure that became a focal point as lawyers argued over the company’s structure and financing. (money.usnews.com) Musk sued OpenAI in 2024, alleging that Sam Altman and Greg Brockman abandoned the startup’s original nonprofit mission. Reuters reported that Musk is seeking $150 billion in damages from OpenAI and Microsoft to be paid to the nonprofit, and is also seeking Altman’s and Brockman’s removal from their roles. (nytimes.com) ### What does the cap change for investors and partners? The clearest immediate effect is contractual certainty. Microsoft said the amended agreement was intended to provide “flexibility” and “certainty,” while keeping Microsoft as a major shareholder and primary cloud partner. OpenAI said the same framework would let it pursue new opportunities while continuing to build AI platforms with Microsoft. (money.usnews.com) Reuters reported that the payment cap could help OpenAI present a stronger long-term case to investors as it works toward a possible public offering. That assessment was attributed to The Information’s report and to executives cited there, not to a public filing by OpenAI or Microsoft. (blogs.microsoft.com) ### What should readers watch next? Through 2030, OpenAI will continue making revenue-share payments to Microsoft under the amended deal. Through 2032, Microsoft will keep its non-exclusive license to OpenAI intellectual property for models and products. In court, the next milestone is the outcome of Musk’s case after closing arguments delivered on May 14 in Oakland, California. (blogs.microsoft.com) (money.usnews.com)