In a particularly unsurprising turn of events, OpenAI is reportedly planning to slash Microsoft’s revenue share (via The Information).
This news comes after the ChatGPT maker’s CEO announced that the AI firm jumped ship on its plan to evolve into a for-profit entity. Instead, the company is following a different approach where the non-profit business will retain control over the for-profit division.
According to The Information, financial projections shared by investors suggest that Microsoft’s revenue share of OpenAI’s business will likely drop by at least half within this decade.
As you may know, Microsoft is OpenAI’s largest investor with a $13.5 billion stake in its business. According to their existing multi-billion dollar partnership, OpenAI shares 20% of its revenue with Microsoft. The arrangement is expected to run through 2030.
However, this report suggests that Microsoft’s revenue share in OpenAI’s business could drop from 20% to 10% within this decade. While Microsoft seemingly wants to leverage OpenAI’s technology beyond 2030, the once-best tech bromance in history has been subtly fraying.
OpenAI unveiling its $500 billion Stargate project set the tone, raising concern among investors and consumers. While the ChatGPT maker indicated that the move was designed to facilitate the construction of data centers across the United States, Microsoft lost its exclusive cloud provider status with OpenAI, though it retains the right of refusal.
The Stargate project prompted Microsoft to make some critical changes to its partnership agreement with OpenAI in a bid to protect its multi-billion-dollar investment. However, the tech giant insists that key elements of the initial agreement will remain in place through 2030.
While speaking to The Information, OpenAI echoed similar sentiments:
“We continue to work closely with Microsoft, and look forward to finalizing the details of this recapitalization in the near future.”
To that end, Microsoft has seemingly taken a back seat with its partnership with OpenAI. Salesforce CEO Marc Benioff predicted that Microsoft won’t use OpenAI’s technology in the future, which is seemingly coming to fruition after a report emerged that Microsoft is developing in-house AI models.
A separate report revealed that Microsoft no longer wants to facilitate additional training support for OpenAI’s ChatGPT, prompting it to wiggle out of two mega datacenter deals. However, the ChatGPT maker’s CEO, Sam Altman, indicated that the AI firm is no longer “compute-constrained”, suggesting that it is able to support its sophisticated advances in AI.
