OpenAI-Microsoft Deal Caps Revenue at $38 Billion

OpenAI and Microsoft have established a $38 billion cap on total revenue-sharing payments in a recently renegotiated partnership agreement, according to sources familiar with the terms. The arrangement, finalized in recent weeks, grants OpenAI greater flexibility to form alliances with other cloud providers such as Amazon and Google while positioning the company for a potential initial public offering as early as the fourth quarter of 2026.

The cap limits OpenAI's future financial obligations to Microsoft, providing the predictability that investors often seek ahead of a public listing. Neither company has publicly confirmed the details. Microsoft's shares fell 0.59 percent following the report.

Under the revised terms, Microsoft remains OpenAI's primary cloud infrastructure provider. New OpenAI products will launch first on Microsoft's Azure platform, provided Microsoft can and chooses to meet the required technical specifications. The companies ended Microsoft's exclusive licensing rights to OpenAI's technology, extending nonexclusive access through 2032.

Microsoft has invested approximately $13 billion in OpenAI since 2019. That funding helped propel OpenAI's growth,...