OpenAI plans to cut revenue share of Microsoft, partners

OpenAI plans to cut revenue share of Microsoft, partners

FILE PHOTO: OpenAI logo is seen in this illustration taken May 20, 2024. REUTERS/Dado Ruvic/Illustration/File Photo

OpenAI has projected that by the end of the decade it will be sharing about 8% of its revenue with commercial partners, namely Microsoft, down from the current 20%, The Information reported on Friday.

The difference between those figures adds up to more than $50 billion in additional revenue OpenAI would keep for itself, the report said.

The report was not clear if that was an accumulative or annual figure. OpenAI and Microsoft did not immediately respond to Reuters requests for comment.

The two companies are also negotiating how much OpenAI will have to pay to rent servers from Microsoft, the report said, citing a person briefed on the discussions.

Microsoft and OpenAI said on Thursday they have signed a non-binding deal for new relationship terms that would allow OpenAI to restructure itself into a for-profit company.

OpenAI said under current terms, its nonprofit arm will receive more than $100 billion – about 20% of the $500 billion valuation it is seeking in private markets – making it one of the world’s most well-funded nonprofit operations, according to a memo from Bret Taylor, chairman of OpenAI‘s nonprofit board.

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