Report: OpenAI Aims to Reduce Revenue Sharing With Microsoft

OpenAI is reportedly envisioning a future where it shares less revenue with longtime benefactor Microsoft.

The artificial intelligence startup has an agreement with Microsoft to share 20% of its top-line revenue. However, OpenAI told investors it expects to share just 10% of its revenue with its partners, Microsoft among them, by 2030, The Information reported Tuesday (May 6), citing financial documents.

The company continues “to work closely with Microsoft and [looks] forward to finalizing the details of this recapitalization in the near future,” an OpenAI spokesperson said, per the report.

Microsoft has invested billions of dollars in OpenAI, with an agreement to continue sharing revenue until 2030, the report said.

Meanwhile, Microsoft’s strategy of installing AI as a default feature on its software seemed to be bearing fruit. The company recorded a 10% uptick in revenue from consumer subscriptions to Office 365 in the three months ending in March versus a year prior.

News about OpenAI’s revenue plans came one day after the company announced it would revise its corporate plan to keep its nonprofit parent firmly in control of the for-profit entity behind ChatGPT. That decision reverses the company’s earlier plan that would have given up voting power in exchange for easier fundraising.

“When we started OpenAI, we did not have a detailed sense for how we were going to accomplish our mission,” CEO Sam Altman wrote in a Monday (May 5) company blog post. “We started out staring at each other around a kitchen table, wondering what research we should do. Back then, we did not contemplate products, a business model. We could not contemplate the direct benefits of AI being used for medical advice, learning, productivity and much more, or the needs for hundreds of billions of dollars of compute to train models and serve users.”

OpenAI is in the middle of planning a $40 billion funding round led by SoftBank, which could value the company at roughly $300 billion. The round had been contingent on the company switching to for-profit control.

Keeping the nonprofit arm could complicate the fundraising effort, but it could also help to defuse a lawsuit from OpenAI co-founder Elon Musk, who accuses the company of straying from its public-interest roots.

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