OpenAI to Share Only 8% of Revenue with Microsoft, Eyes $50bn Earning Boost as Partnership Terms Shift

OpenAI is preparing for a significant shift in its financial relationship with Microsoft, potentially retaining a greater share of its revenue in the coming years. According to The Information, the company projects that by the end of the decade, it will be sharing just 8% of its revenue with commercial partners such as Microsoft, down from the roughly 20% it currently hands over.

The gap between those figures represents more than $50 billion in additional revenue that OpenAI could keep for itself, though the report noted it was unclear whether that estimate was cumulative or annual.

At the heart of the matter are ongoing negotiations between the two companies over the cost of cloud computing resources. OpenAI rents servers from Microsoft’s Azure platform, and the terms of that agreement are under review as the partnership evolves.

On Thursday, both companies disclosed they had signed a non-binding agreement to reshape their relationship, a deal that could pave the way for OpenAI to fully restructure into a for-profit enterprise. Under current arrangements, OpenAI’s nonprofit arm is slated to receive more than $100 billion — approximately 20% of the $500 billion valuation it is targeting in private markets. That makes it one of the most heavily funded nonprofit entities in the world, according to a memo from Bret Taylor, chairman of OpenAI’s nonprofit board.

The new financial model would mark a significant recalibration in one of the most closely watched corporate partnerships in technology. Microsoft has been both OpenAI’s largest investor and its essential infrastructure provider, pouring billions into the startup and integrating its models across its software ecosystem. A reduction in Microsoft’s revenue share would allow OpenAI to capture more of the returns on its own growth while still relying heavily on Microsoft’s cloud services to scale its operations.

Across Silicon Valley, Big Tech firms are rewriting the rules of AI partnerships as generative models become central to business strategies. Google, for example, invested billions in Anthropic while structuring its stake to maintain some degree of competitive distance, offering Anthropic access to Google Cloud without binding it exclusively to Google’s ecosystem. Amazon has taken a different approach, securing a minority stake in Anthropic and tying the deal closely to its AWS infrastructure, effectively using its cloud dominance as leverage to lock in AI growth.

These divergent models underline how partnerships are shaping the future of tech companies in Silicon Valley. Microsoft’s early and deep integration with OpenAI has given it a head start in embedding generative AI into products like Office and Bing. But as OpenAI seeks more independence, the renegotiated terms could reshape Microsoft’s influence over its trajectory. Meanwhile, competitors like Google and Amazon are spreading their bets across multiple AI startups, balancing investment with flexibility.

The broader implication is that the financial underpinnings of AI development are now as competitive as the technology itself. For OpenAI, reducing revenue-sharing obligations could provide breathing room to chart a more autonomous course. For Microsoft, the recalibration underscores the challenges of betting so heavily on a single partner at a time when others are intensifying their push to set the pace of AI advancement.

OpenAI has generated nonstop buzz, secured substantial funding and committed billions to infrastructure, but its next step might be the toughest — paying for its ambitions. Massive deals with Oracle and Broadcom topping $300 billion are shining a spotlight on the AI pioneer’s relatively paltry revenues. The company expects to make $13 billion this year, per The Information, before generating anticipated revenues of $100 billion by 2028, The Wall Street Journal reports, citing an anonymous source. That can’t happen without millions of new paying customers.