OpenAI likely to cut Microsoft's revenue share mid restructuring plans

OpenAI is reportedly planning to reduce the percentage of revenue it shares with Microsoft as part of its ongoing restructuring process, according to information shared with investors on Tuesday. This move comes as the company looks to dial back its ambitious restructuring plan, with its nonprofit parent organization maintaining control, a shift likely to curb CEO Sam Altman’s influence within the firm. The major shift in OpenAI’s financial outlook suggests that, by the end of this decade, the tech company plans to share a significantly smaller portion of its revenue with Microsoft—potentially cutting the current share in half. Under the terms of an existing deal, OpenAI had agreed to share 20% of its revenue with Microsoft through 2030. However, new projections shared with investors indicate that OpenAI will reduce this share to just 10% by 2030. The official report, which cites private documents, also suggests that Microsoft remains keen on accessing OpenAI's cutting-edge technology beyond the current agreement period.
In January, Microsoft reportedly renegotiated key terms in its partnership with OpenAI following the launch of a joint venture with Oracle and Japan's SoftBank Group, aimed at building up to $500 billion in AI-focused data centers in the United States. While the specifics of these new terms remain unclear, Microsoft has assured that the essential components of its partnership with OpenAI, including the revenue-sharing structure, will stay intact through 2030.
"We continue to work closely with Microsoft and look forward to finalizing the details of this recapitalization in the near future," an OpenAI spokesperson reportedly stated. Despite these changes, the spokesperson emphasized that the core elements of their collaboration will remain unchanged for the duration of their current agreement.

(Business Correspondent)