OpenAI Plans 10% Revenue Share Cut With Microsoft By 2030

OpenAI has informed some potential and current investors of its plan to significantly reduce its revenue share with Microsoft by 2030. The company intends to decrease the share from the current 20% to just 10% of its revenues with commercial partners, including Microsoft. This decision is part of OpenAI's ongoing restructuring efforts, which have seen the company scale back a significant restructuring plan that would have limited the influence of CEO Sam Altman. The nonprofit parent company of OpenAI will retain control, a move that is likely to curtail Altman's influence.

Microsoft, which has invested $13.75 billion in OpenAI, is the primary opponent of the restructuring plan, seeking to safeguard its investment interests. The two companies have a unique relationship through a licensing and revenue-sharing agreement. Negotiations between Microsoft and OpenAI are ongoing, focusing on licensing, revenue share, and equity holdings. In January, Microsoft revised key terms of its agreement with OpenAI, following its joint venture with Oracle and Japan's SoftBank Group to establish new AI data centers in the U.S. worth up to $500 billion. OpenAI continues to work closely with Microsoft and is expected to finalize details of the capital restructuring soon.

The decision to reduce the revenue share with Microsoft is a strategic move by OpenAI to maintain more control over its financial operations. By lowering the revenue share, OpenAI aims to retain a larger portion of its earnings, which can be reinvested into research and development, further strengthening its position in the AI industry. This move also reflects OpenAI's commitment to its nonprofit roots, ensuring that its technology is used for the benefit of humanity rather than solely for profit.

The ongoing negotiations between Microsoft and OpenAI highlight the complex nature of their partnership. While Microsoft seeks to protect its investment, OpenAI aims to maintain its independence and control over its technology. The outcome of these negotiations will have significant implications for both companies, as well as for the broader AI industry. As OpenAI continues to develop and deploy advanced AI technologies, its relationship with Microsoft will remain a critical factor in shaping the future of the industry.