OpenAI and Microsoft have renegotiated their commercial agreement, setting a $38 billion cap on the total revenue share Microsoft can receive. Under the earlier structure, and based on projected growth cited in the report, Microsoft could theoretically have collected as much as $135 billion before the contract expired. Once the new cap is reached, the remaining revenue stays with OpenAI.
The revision comes as OpenAI’s business has expanded far beyond the scale envisioned when the original terms were signed. According to people familiar with the matter cited by The Information, the two companies finished the renegotiation last month. With OpenAI’s revenue rising sharply over the past two years, a proportional sharing arrangement that once looked acceptable has become much heavier at a larger base.
The old structure became harder to justify as revenue climbed
Microsoft first backed OpenAI in 2019 and has invested about $13 billion in total. In return, it secured Azure’s status as OpenAI’s exclusive cloud provider, along with a long-term revenue-sharing agreement. That structure helped OpenAI survive an earlier period of capital constraints and gave Microsoft one of the most valuable strategic positions in the AI sector.
The tension emerged as OpenAI’s financial profile changed. The report says the company’s annualized revenue had already exceeded $10 billion by 2025 and was still accelerating. If the original agreement had remained in place through 2030, and growth continued on a linear basis, Microsoft’s cumulative take could have reached $135 billion. For a company considering an IPO, that kind of open-ended claim on future cash flow can weigh on how investors judge long-term earnings power.
OpenAI also gains room to buy cloud services elsewhere
The updated agreement did more than place a ceiling on payouts. Microsoft also gave up Azure’s exclusive cloud supplier status, allowing OpenAI to buy infrastructure from AWS, Google Cloud, and other providers. That change affects more than technical operations. It gives OpenAI more leverage on pricing and more flexibility in how it builds out its infrastructure footprint.
Under the earlier arrangement, Azure exclusivity had been a major obstacle as OpenAI explored relationships with other cloud platforms. With that restriction removed, the company now has broader room to negotiate and deepen business ties with Amazon, Google, and others.
A cleaner story for public market investors
One of the basic questions in any IPO process is how much of a company’s future revenue it actually keeps. OpenAI, which the report says is valued at $300 billion, faced a harder sell with an uncapped sharing obligation hanging over future results. The new $38 billion ceiling gives investors a clearer line on where that obligation ends.
The added multi-cloud flexibility also changes how OpenAI can present itself to the market. It is no longer locked into Microsoft’s cloud stack alone, which supports the argument that OpenAI operates as an independent company with infrastructure choice rather than as an extension of a single strategic partner. For OpenAI, the contract reset trims uncertainty on both the financial and operational sides.