OpenAI is planning to significantly reduce the percentage of revenue it shares with Microsoft, its largest investor and strategic partner, by the end of this decade.
According to financial documents reviewed by The Information, OpenAI currently shares 20% of its top-line revenue with Microsoft but has informed investors it expects to cut this to approximately 10% by 2030. This revelation comes amid broader changes at the AI company, which recently modified its restructuring strategy.
Earlier this month, OpenAI announced it would abandon plans to separate its nonprofit and for-profit arms. Instead, the company will convert its for-profit division into a public benefit corporation (PBC) while maintaining control through its nonprofit parent. This decision followed discussions with the attorneys general of California and Delaware, as well as feedback from civic leaders.
"OpenAI was founded as a non-profit, is today a non-profit that oversees and controls the for-profit, and going forward will remain a non-profit that oversees and controls the for-profit. That will not change," CEO Sam Altman stated in a recent blog post.
The partnership between OpenAI and Microsoft, which began in 2019, has been fundamental to both companies' AI strategies. Microsoft has invested more than $13 billion in OpenAI and currently has a contract that runs through 2030. This agreement includes revenue sharing arrangements flowing both ways, Microsoft's rights to OpenAI's intellectual property for use in products like Copilot, and exclusivity for OpenAI's APIs on Azure.
However, the relationship appears to be evolving. Microsoft is reportedly a key holdout in approving OpenAI's new corporate structure, as the tech giant seeks to ensure its substantial investment is adequately protected. According to the Financial Times, the companies are engaged in "tough negotiations" with Microsoft potentially willing to give up some equity in exchange for extended access to OpenAI's technology beyond the 2030 cutoff date.
The outcome of these negotiations could significantly impact both companies' futures in the increasingly competitive AI landscape, where rivals like Anthropic and Elon Musk's xAI have adopted similar public benefit corporation structures while raising billions in funding.