OpenAI has informed its investors that it plans to reduce the revenue share it shares with its largest commercial partner, Microsoft, as part of a broader internal restructuring. At the same time, it will maintain control under its non-profit parent company. According to The Information, under the current agreement, OpenAI is required to allocate 20% of its revenue to Microsoft by the end of this decade. However, media reports suggest that OpenAI has notified investors that it now expects to cut this figure in half. By 2030, the company anticipates limiting revenue sharing with Microsoft and other commercial entities to approximately 10%.
This move implies that OpenAI will retain more of its earnings, potentially preparing for further growth. Currently, this adjustment is being implemented as OpenAI revises its earlier restructuring blueprint. The non-profit parent organization will retain overall control, which in turn limits the influence of CEO Sam Altman, who was initially expected to wield greater power within the company. It remains unclear whether this will prompt Microsoft to renegotiate terms with OpenAI.
To provide some context, since 2019, Microsoft has invested billions of dollars in OpenAI and remains its key infrastructure and commercial partner. This investment has played a crucial role in making generative AI the latest trend in the global tech industry. The Redmond-based tech giant has integrated OpenAI's models, including the GPT series, into products like Microsoft Office, Azure, and Bing. Through Azure, Microsoft provides cloud infrastructure and gains exclusive access to commercialize OpenAI’s technologies and AI model suite. Microsoft also emphasized that its revenue-sharing arrangement with OpenAI is reciprocal and stated that core elements of the partnership will remain unchanged under the current agreement, which is valid until 2030. An OpenAI spokesperson commented, "We will continue to work closely with Microsoft and look forward to finalizing the details of this capital restructuring in the near future." Beyond this, neither company has made public comments.
The rebalancing of revenue shares comes as OpenAI actively restructures its organizational framework and revenue model, removing caps on investor returns. On May 5, the company officially confirmed that its non-profit entity would remain in charge and transition into a "public benefit corporation."
"OpenAI was founded as a non-profit organization and is today overseen and controlled by that non-profit," announced OpenAI Board Chair Bret Taylor in a blog post at the time. "In the future, it will continue to be overseen and controlled by that non-profit." This development also follows Microsoft's modification of certain terms of its OpenAI agreement earlier this year through separate joint ventures with Oracle and SoftBank. The Stargate agreement aims to establish large-scale AI-focused data centers in the U.S., reportedly valued at up to $500 billion.
