Microsoft's revenue share capped at $38bn in new OpenAI deal; OpenAI can sell products

OpenAI and Microsoft rewrote the commercial terms of their alliance on April 27, loosening one of the most important exclusivity arrangements in the artificial-intelligence market. The new agreement lets OpenAI serve all of its products across any cloud provider, while Microsoft keeps Azure as OpenAI’s “primary cloud partner” and the first launch venue for products unless it cannot support the required capabilities. Microsoft also said its license to OpenAI intellectual property through 2032 is now non-exclusive, and that OpenAI will continue paying Microsoft a revenue share through 2030, subject to a total cap. ### What changed in the cloud relationship? Microsoft said on April 27 that OpenAI products will still ship first on Azure, but OpenAI can now serve those same products to customers across any cloud provider. That ends Azure’s former exclusive position as the sole commercial home for OpenAI’s products and models, even as Microsoft remains the primary infrastructure partner under the revised deal. (blogs.microsoft.com) OpenAI said in the joint announcement, as quoted by CNBC, that the amendment was designed to add “flexibility” and “certainty.” CNBC also reported that OpenAI revenue chief Denise Dresser told staff in an internal memo earlier in April that the old structure had “limited our ability to meet enterprises where they are.” ### How did the money terms change? Revenue-sharing payments from OpenAI to Microsoft will continue through 2030 at the same percentage as before, but they are now subject to a total cap, Microsoft said. (blogs.microsoft.com) CNBC, citing a person familiar with the confidential agreement, reported that the percentage remains 20%, meaning Microsoft still receives a cut of OpenAI sales such as ChatGPT subscriptions. (cnbc.com) The Information, as cited by Reuters and other outlets, reported that the total cap is $38 billion. Reuters said on May 11 that OpenAI had agreed to limit the total revenue it shares with Microsoft to that amount. Microsoft’s April 27 blog post did not disclose the dollar figure. ### How much has Microsoft already put into the partnership? (blogs.microsoft.com) Bloomberg reported on May 13 that Microsoft has spent more than $100 billion on its OpenAI partnership to date. Bloomberg said Microsoft deals executive Michael Wetter testified that the total includes the company’s original investments, infrastructure build-out and the cost of hosting OpenAI’s computing, and that the figure is cumulative through Microsoft’s current fiscal year ending in June. (msn.com) CNBC separately reported that Microsoft has invested more than $13 billion in OpenAI since 2019. The Bloomberg figure is much larger because it includes not only equity investment but also datacenter and hosting costs tied to the partnership. ### What did Microsoft keep in the revised deal? Microsoft said it will continue to hold a license to OpenAI intellectual property for models and products through 2032, but that license is no longer exclusive. (bloomberg.com) The company also said it will no longer pay a revenue share to OpenAI under the amended arrangement. The April 27 statement also removed an earlier provision tied to OpenAI reaching artificial general intelligence, or AGI. (cnbc.com) CNBC reported that Microsoft no longer needs to determine its response if OpenAI concludes it has reached AGI, another sign that the companies simplified terms that had governed control and economics in the original partnership. ### Why does this matter for customers buying OpenAI products? (blogs.microsoft.com) Amazon and Google were named by CNBC as cloud providers OpenAI can now use to serve customers under the new terms. That gives enterprise buyers a wider set of deployment options than under the prior Azure-exclusive setup, while preserving Microsoft’s preferred position for initial launches. Through 2030, the next concrete milestone is financial rather than symbolic: OpenAI will keep paying Microsoft under the capped revenue-share arrangement, and Microsoft’s current fiscal year — the period Bloomberg used for the more-than-$100-billion tally — ends in June 2026. (cnbc.com) (blogs.microsoft.com)