OpenAI to Cut Microsoft Revenue Share to 10% by 2030, Projects Hundreds of Billions in Revenue

OpenAI has informed investors of its intention to reduce the percentage of revenue it shares with Microsoft from the current 20% to 10% by 2030, as part of its ongoing restructuring efforts. This move is part of a broader strategy to adjust its financial relationship with its major backer, Microsoft, amid a significant restructuring plan. OpenAI projects its revenue to reach hundreds of billions by 2030, and proposes to swap the 20% revenue share with Microsoft for a single-digit royalty plus equity, while also waiving the AGI clause. The proposed change in revenue sharing comes as OpenAI shifts its corporate structure, with its nonprofit parent retaining control, which could limit the influence of CEO Sam Altman over the company. Some leaders within OpenAI also want future products to be exempted from this revenue-sharing agreement. The restructuring also includes negotiations with Microsoft, which has not yet approved the new corporate structure. Microsoft, having invested tens of billions in OpenAI, seeks to maintain access to OpenAI's technology beyond 2030, highlighting the importance of their partnership. The current revenue-sharing agreement between the two companies is set to expire in 2030, and discussions are ongoing regarding the future terms of their collaboration. Microsoft's investment also grants it rights to OpenAI's intellectual property within its AI products and exclusivity on OpenAI's APIs on Azure.