OpenAI, the artificial intelligence powerhouse behind ChatGPT, is preparing to significantly reduce the share of revenue it pays to Microsoft, its largest investor and strategic partner, as part of a sweeping internal restructuring. The move, confirmed by multiple sources familiar with the matter, signals a recalibration of one of the most high-profile alliances in the tech sector.
Currently, OpenAI shares 20% of its revenue with Microsoft under an agreement set to run through 2030. However, according to recent investor briefings and internal financial documents, OpenAI now expects to cut Microsoft’s share to around 10% by the end of the decade. This represents a reduction of at least 50% in Microsoft’s revenue participation compared to current terms.
The decision comes as OpenAI scales back a previously proposed overhaul that would have increased CEO Sam Altman’s control over the organization. Instead, OpenAI’s nonprofit parent will retain governance authority, effectively limiting Altman’s influence and reinforcing the nonprofit’s oversight of commercial operations.
This governance structure is seen as a move to ensure that OpenAI’s mission remains focused on the safe and broad deployment of artificial general intelligence.
Microsoft, which has invested more than $13 billion in OpenAI-including a landmark $10 billion deal in 2023-has been instrumental in integrating OpenAI’s models into its own products, such as Copilot, and in hosting OpenAI’s APIs exclusively on the Azure cloud platform.
The current agreement not only involves revenue sharing but also grants Microsoft exclusive access to OpenAI’s intellectual property and technology stack for use in its enterprise and consumer offerings.
Despite the anticipated reduction in revenue share, both companies have reiterated their commitment to the partnership. Microsoft emphasized that the core elements of its collaboration with OpenAI, including access to AI models and exclusivity on certain APIs, will remain in place through the end of the current contract.
OpenAI, for its part, stated that it continues to work closely with Microsoft and expects to finalize the details of the restructuring in the near future.
The restructuring and renegotiation of financial terms come at a time of heightened scrutiny of OpenAI’s governance and business model. The nonprofit board’s decision to maintain control is seen as a response to both internal debate and external legal challenges, including those from prominent figures such as Elon Musk and state attorneys general.
Looking ahead, Microsoft is reportedly seeking assurances of continued access to OpenAI’s technology beyond 2030, as generative AI becomes increasingly central to its product and cloud strategies.
The partnership’s evolution will be closely watched by industry observers, given its impact on the broader AI landscape and the competitive dynamics among tech giants vying for leadership in artificial intelligence.
With OpenAI’s restructuring underway and a new revenue-sharing arrangement on the horizon, the tech industry is poised for further shifts as both companies adapt to the rapidly changing demands of the AI era.