OpenAI renegotiated Microsoft contract after missing early‑May revenue targets

OpenAI and Microsoft rewrote key terms of their partnership on April 27, weeks after reports that OpenAI had missed internal revenue and user-growth targets earlier in 2026. The revised agreement kept Microsoft as OpenAI’s primary cloud partner, but ended exclusivity on Microsoft’s license to OpenAI intellectual property and allowed OpenAI to sell products across other cloud platforms. Reuters reported on May 11 that the two companies also agreed to cap the total revenue OpenAI shares with Microsoft at $38 billion, citing The Information. OpenAI and Microsoft did not immediately comment on that Reuters report. ### What changed in the Microsoft deal? Microsoft said on April 27 that OpenAI products would still ship first on Azure unless Microsoft could not support the needed capabilities. The company also said OpenAI could now serve all of its products to customers across any cloud provider, while Microsoft would retain a license to OpenAI models and products through 2032 on a non-exclusive basis. Revenue-sharing payments from OpenAI to Microsoft would continue through 2030 at the same percentage as before, Microsoft said, but those payments would now be subject to an overall cap. (blogs.microsoft.com) Reuters reported on May 11 that the cap was set at $38 billion, citing The Information and a person with knowledge of the arrangement. Reuters said it could not immediately verify the report. ### What was happening inside OpenAI before the rewrite? The Wall Street Journal report summarized by Reuters and other outlets said OpenAI had missed multiple monthly revenue targets earlier this year and had also fallen short of an internal goal of reaching 1 billion weekly active ChatGPT users by the end of 2025. (blogs.microsoft.com) CNBC and Forbes, citing the Journal, said Chief Financial Officer Sarah Friar had warned other company leaders that OpenAI might struggle to fund future computing contracts if revenue growth did not accelerate. (money.usnews.com) Steve Sharpe, an OpenAI spokesperson, called the Journal report “clickbait” in a statement to Forbes. Forbes said OpenAI maintained that its consumer and enterprise businesses remained strong. ### Why did the renegotiation matter to investors? Reuters said the payment cap could help OpenAI present a stronger long-term case to investors as it worked toward a public offering that some executives said could come as soon as the end of 2026. (money.usnews.com) Semafor said the revised Microsoft terms appeared to shore up revenue and flexibility as OpenAI faced questions about whether it could support its spending plans. (forbes.com) OpenAI said in March that it had topped $25 billion in annualized revenue at the end of February, according to a Reuters report citing The Information. That figure was up 17% from $21.4 billion at the end of 2025, Reuters said. ### Where did the $207 billion shortfall figure come from? (money.usnews.com) HSBC projected in late 2025 that OpenAI would remain negative on a cumulative free-cash-flow basis through 2030 and face a $207 billion funding gap, according to reports citing the bank’s model. Those reports said the estimate reflected heavy spending on data-center leases, chips and cloud-computing commitments even under assumptions of strong revenue growth. (money.usnews.com) The $207 billion figure circulated again on social media on May 16 alongside references to the renegotiated Microsoft terms and OpenAI’s revenue run rate. That figure was not newly disclosed by OpenAI this week; it traced to earlier analyst estimates reported by outside publications. (economictimes.indiatimes.com) ### How does this fit with OpenAI’s broader financing push? OpenAI said in March that it had closed a $122 billion funding round at an $852 billion post-money valuation, according to CNBC. Forbes said that valuation followed a period in which investors and partners were already watching whether OpenAI’s revenue growth could keep pace with large infrastructure commitments. (economictimes.indiatimes.com) Microsoft said on April 27 that the amended agreement was meant to provide “long-term clarity,” while preserving joint work on datacenter capacity, next-generation silicon and cybersecurity. The revised contract, the reported $38 billion payment cap, and any future IPO filing are the next public markers for investors tracking the partnership. (blogs.microsoft.com) (cnbc.com)