OpenAI plans to cut Microsoft revenue share after restructuring: Report

The ChatGPT-maker has dialed back a significant restructuring plan [File]
| Photo Credit: AP

OpenAI has told investors it will share a smaller fraction of revenue with major backer Microsoft as it moves ahead with its restructuring, The Information reported on Tuesday.

The ChatGPT-maker has dialed back a significant restructuring plan, with its nonprofit parent retaining control in a move that is likely to limit CEO Sam Altman’s power over the firm.

In financial projections shared with investors, OpenAI said the percentage of revenue shared with Microsoft would drop by at least half by the end of this decade, the report said.

In an existing deal, OpenAI has agreed to share 20% of its revenue with Microsoft through 2030, the Information reported.

OpenAI told some potential and current investors that it would only share 10% of revenues with commercial partners including Microsoft by 2030, the report said, citing private documents, adding that Microsoft wants access to OpenAI’s technology beyond 2030.

In January, Microsoft changed some key terms of a deal with OpenAI after its joint venture with Oracle and Japan’s SoftBank Group to build up to $500 billion of new artificial intelligence data centres in the United States.

Microsoft has said it has “revenue sharing agreements that flow both ways” with OpenAI, with the key elements of the partnership remaining in place for the duration of the contract 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 told The Information.

OpenAI and Microsoft did not immediately respond to Reuters’ requests for comment outside regular business hours.