OpenAI’s new plan means less cash for Microsoft
OpenAI expects to reduce the share of its revenue paid to Microsoft by 2030, according to a report by The Information, citing the company’s financial documents. This development comes as OpenAI has unveiled a major restructuring plan, transforming its for-profit arm into a public benefit corporation (PBC) while remaining under the control of its nonprofit division.
Currently, OpenAI is contracted to share 20% of its revenue with Microsoft, but it anticipates this figure will drop to 10% by the end of the decade, not just for Microsoft, but for its business partners overall, The Information reported. Microsoft has invested tens of billions of dollars in OpenAI, and their agreement, set to expire in 2030, includes mutual revenue sharing. Additionally, the deal grants Microsoft access to OpenAI’s intellectual property within its AI products and exclusive rights to OpenAI’s APIs on Azure.
Microsoft’s approval of OpenAI’s proposed corporate restructuring is pending, Bloomberg reported, as the tech giant seeks assurances that its substantial investment is protected under the new structure. OpenAI and Microsoft have not responded to requests for comment.