Microsoft reports $7.6 billion net income gain from OpenAI investment
Microsoft reported a $7.6 billion increase in net income from its investment in OpenAI during its latest quarterly earnings released on Wednesday.
The software company has invested more than $13 billion in the AI lab. OpenAI reportedly operates under a 20% revenue-share agreement with Microsoft, although neither entity has publicly confirmed this arrangement. OpenAI currently seeks additional funding at a valuation ranging from $750 billion to $830 billion, as reported by Bloomberg.
In September, OpenAI restructured into a public benefit corporation, prompting Microsoft and OpenAI to renegotiate terms of their partnership. Under the revised agreement, OpenAI committed to purchasing an additional $250 billion in Azure services from Microsoft.
This commitment registers on Microsoft’s financial statements as “commercial remaining performance obligations,” defined as contracts Microsoft holds that remain unpaid. The total value of these obligations rose sharply to $625 billion from $392 billion in the prior quarter. Microsoft specified that 45% of the current obligations derive from OpenAI.
The earnings report also referenced Anthropic’s role in driving growth, noting a 230% increase in commercial bookings. In November, Microsoft disclosed a $5 billion investment in Anthropic. Separately, Anthropic agreed to $30 billion in Azure compute capacity, expressing intent to acquire more capacity later.
Microsoft allocated $37.5 billion to capital expenditures during the quarter. Two-thirds of this amount funded short-lived assets, consisting primarily of GPUs and CPUs deployed in the Azure cloud platform to support AI workloads.