OpenAI and Microsoft Cap Revenue Sharing at $38 Billion
The companies recently renegotiated their contract to allow OpenAI more flexibility for new partnerships with firms like Amazon and Google. This payment cap may strengthen the long-term pitch to investors as OpenAI potentially prepares for a public offering as early as the end of this year.
OpenAI and Microsoft Corp agreed to cap total revenue-sharing payments at $38 billion, according to United States news outlet The Information. A contract renegotiation last month allows OpenAI to partner with Amazon.com Inc and Alphabet Inc. The payment ceiling improves OpenAI's long-term valuation as it prepares for a potential initial public offering.
The Information reported the arrangement on Monday, citing a person familiar with the matter. Microsoft previously committed $13 billion to the AI startup since 2019, fueling OpenAI's growth and supporting Microsoft's Azure cloud business.