OpenAI reportedly plans to cut the share of revenue it pays to Microsoft Corporation (NASDAQ:MSFT) by at least half by the end of the decade.
What Happened: OpenAI has informed investors that it will reduce the percentage of revenue it shares with Microsoft, its largest backer, reported Reuters on Tuesday (via The Information).
Currently, OpenAI has an agreement to share 20% of its revenue with Microsoft through 2030. However, internal financial projections shared with investors suggest that figure will drop to just 10% by the end of the decade, the report said, citing private documents.
An OpenAI spokesperson told The Information, “We continue to work closely with Microsoft, and look forward to finalizing the details of this recapitalization in the near future.”
OpenAI and Microsoft did not immediately respond to Benzinga’s request for comments.
Why It’s Important: The latest development comes a day after OpenAI’s nonprofit parent decided to retain control over the company.
In January, Microsoft revised certain terms of its agreement with OpenAI following the announcement of a separate joint venture involving Oracle Corp (NYSE:ORCL) and Japan’s SoftBank Group (OTC:SFTBF) (OTC:SFTBY) to invest up to $500 billion in new AI data centers across the U.S.
Microsoft has stated that its agreement with OpenAI includes reciprocal revenue-sharing provisions and that the core components of their partnership are set to remain active through the end of the contract in 2030, the report said.
Microsoft received a robust growth score of 64.83% from Benzinga Edge Stock Rankings. Click here to compare its performance with other major tech firms such as Oracle and SoftBank.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
