OpenAI to Retain More Revenue as Microsoft Share Drops
OpenAI is expected to significantly reduce the share of its revenue going to commercial partners like Microsoft by the end of the decade. According to a report from The Information, OpenAI currently shares about 20% of its revenue with Microsoft. However, this figure is projected to drop to just 8% over the coming years.
The difference between the current and projected revenue-sharing models could result in more than $50 billion in additional revenue retained by OpenAI. The report did not clarify whether that amount reflects annual or cumulative revenue gains. OpenAI and Microsoft have not yet responded to requests for comment from Reuters.
Server Costs and Restructuring Under Negotiation
As the companies reshape their partnership, they are also renegotiating how much OpenAI will pay to use Microsoft’s server infrastructure. These discussions could further impact the financial terms of their long-term collaboration, The Information reported, citing sources familiar with the talks.
On Thursday, both firms confirmed they had signed a non-binding agreement to update their partnership terms. The deal could pave the way for OpenAI to restructure itself more formally as a for-profit company, shifting away from its original non-profit model.
Non-Profit Arm to Receive Billions in Funding
Under the current structure, OpenAI’s non-profit arm is expected to receive over $100 billion, or roughly 20% of the $500 billion valuation it seeks in private funding markets. This would make it one of the most well-funded nonprofit organisations in the world.
A memo from Bret Taylor, chairman of OpenAI’s nonprofit board, confirmed these figures. The funding arrangement highlights OpenAI’s complex corporate structure, which blends for-profit development with a nonprofit mission.
As OpenAI continues to evolve its business and financial model, its partnership with Microsoft remains central, though clearly in transition.
with inputs from Reuters
