Key Takeaways
- OpenAI plans to cut Microsoft’s share of its future revenue, signaling a shift in the financial terms of their partnership.
- Both OpenAI and Microsoft are moving toward more independent AI development paths while still cooperating at a high level.
- OpenAI is committing to a huge financial effort that focuses on AGI.
OpenAI plans to reduce the share of revenue it provides to Microsoft from 20% to 10% by 2030, as part of a broader restructuring strategy.
The decision follows OpenAI’s reversal of its intention to become a for-profit company. Instead, it will remain under the control of its nonprofit board while transitioning its for-profit subsidiary into a public-benefit corporation.
As both companies continue to innovate in artificial intelligence, the shift in revenue sharing reflects their strategic focus on building expansive AI ecosystems.
OpenAI To Cut Microsoft’s Revenue Share
On Tuesday, May 6, it was reported that OpenAI informed investors it would significantly reduce the portion of revenue shared with Microsoft, its primary financial backer.
According to The Information, the revenue share, currently set at 20% until 2030, will be cut in half or more by the end of the decade.
Investors were told that after 2030, OpenAI would allocate only 10% of its revenues to Microsoft and other commercial partners.
However, Microsoft is reportedly seeking continued access to OpenAI’s technology beyond 2030.
Strategic Shifts
The revised revenue-sharing model comes as OpenAI continues to attract significant investments from global tech leaders.
In January, the company signed a deal with Japan’s SoftBank Group and Oracle to invest $500 billion in building new AI data centers across the U.S.
The Japanese company also led a $40 billion funding round for the company, at a valuation of $300 billion.
Meanwhile, Microsoft is reportedly working to reduce its reliance on OpenAI by developing its own advanced AI models.
In March, reports indicated that Microsoft’s AI division was training reasoning models that could directly compete with OpenAI’s offerings. The company is also testing models from other AI firms.
Despite these developments, both companies have stated their continued commitment to the partnership.
“We continue to work closely with Microsoft, and look forward to finalizing the details of this recapitalization in the near future,” an OpenAI spokesperson told The Information.
OpenAI’s Expensive AGI Pursuit
OpenAI, led by CEO Sam Altman, is undertaking a costly mission to achieve artificial general intelligence (AGI).
In a letter to employees published on Monday, Altman reaffirmed OpenAI’s dedication to building AGI.
“We now see a path for AGI to become the most capable tool in human history, empowering individuals directly,” Altman wrote.
“If we succeed, we believe people will build extraordinary things for one another and drive lasting improvements in society and quality of life.”
Altman added that the company aims to “build a brain for the world and make it super easy for people to use for whatever they want.”
However, the pursuit of AGI comes with staggering financial demands.
According to The Information, OpenAI is spending most of its revenue on computing power needed to operate and develop its AI models.
The company expects these costs to exceed $320 billion between 2025 and 2030, the report stated.
Kurt Robson is a London-based reporter at CCN, specialising in the fast-moving worlds of crypto and emerging technology. He began his career covering local news in Cornwall after graduating from Falmouth University with First Class Honours in Journalism. There, he cut his teeth on everything from council meetings to missing swans.
He quickly rose through the ranks to become a frontline journalist at several of the UK’s leading national newspapers. Over the years, he has interviewed musicians and celebrities, reported from courtrooms and crime scenes, and secured multiple front-page exclusives.
Following the upheaval of the COVID-19 pandemic, Kurt shifted his focus to technology journalism—just ahead of the AI boom. With a natural curiosity and a trained eye for emerging trends, he has found a new rhythm in reporting on innovation.
At CCN, Kurt's work focuses on the cutting edge of crypto, blockchain, AI, and the evolving digital world. Drawing on his background in people-first reporting and his deep interest in disruptive tech, Kurt delivers stories that are insightful, entertaining, and human-centric.
