OpenAI Revises Microsoft Deal, Capping Revenue-Sharing Payments at $38 Billion
OpenAI's revised agreement with Microsoft caps the AI company's revenue-sharing payments at $38 billion, down from as much as $135 billion through 2030 if long-term goals had been met, The Information reported. The change could save OpenAI roughly $97 billion by 2030 and redraw the economics of a landmark partnership that had targeted a $92 billion return for Microsoft from its early investments in OpenAI.
The reported revision adds a fresh financial dimension to scrutiny of the companies' relationship in Elon Musk's lawsuit over OpenAI's shift toward a for-profit structure. In testimony Monday, Microsoft representative Michael Wetter said Microsoft had recognized $9 billion in revenue from its 20% share over the life of the partnership and that the company's approval would be required for OpenAI to convert to a public benefit corporation. Chief Executive Officer Satya Nadella said access to OpenAI's intellectual property was central to Microsoft's decision to partner with the company.
From the sources (23 posts)
@wallstengineOPENAI’S PRESIDENT PRIVATELY WROTE THAT OPENAI WANTED MUSK OUT Greg Brockman’s 2017 journal has become one of the most revealing pieces of evidence in Musk v. Altman. In one entry, Brockman wrote: “the true answer is that we want him out
@mtsliveSITUATION UPDATE: Week three of the Musk v. Altman trial begins today at 8 am PT. Microsoft CEO Satya Nadella is expected to testify today.
@mikeisaacgut morgen from downtown oakland on what may turn out to be the last week of the musk v openai (featuring microsoft!) trial it is cold and i have a a cold coffee to keep me cold
@mikeisaacMSFT exec says MSFT has "recognized $9 billion in revenue" throughout the total life of their partnership with openAI. that is a figure that comes from their 20 percent revenue share. and that's after, i think, accounting for their 13b in
@mtsliveLIVE TRIAL UPDATE: Microsoft corporate representative Michael Wetter confirmed that Microsoft's approval was required for OpenAI to convert to a public benefit corporation.
@mtsliveLIVE TRIAL UPDATE: Satya Nadella testified he received a February 2018 email from Sam Altman informing him that Elon Musk had left OpenAI's board and that the company had created a new for-profit subsidiary.
@mikeisaacNadella, who was yanked out of a meeting when Altman was fired in 2023: "I was pretty surprised to say the least. b/c there was no reach out to me from the board, which i thought would be a pretty obvious thing to do." customers started
@mtsliveLIVE TRIAL UPDATE: Satya Nadella testified that IP access was central to Microsoft's decision to partner with OpenAI. "Without it, it wouldn't make any sense. We were not investing in OpenAI just as an investment -- there was an IP elemen
@mikeisaacdamn. Nadella, when told of new CEO being named at OAI, said "okay great we will support you and also we are going to create a competing company by hiring sam and greg and the gang." cold blooded
@mtsliveLIVE TRIAL UPDATE: Satya Nadella testified that if AGI is achieved, the entire Microsoft-OpenAI partnership agreement would be dissolved, with the nonprofit board of OpenAI solely deciding when that threshold is reached.
@mtsliveLIVE TRIAL UPDATE: Satya Nadella testified that Elon Musk never contacted him to raise objections to Microsoft's 2019 OpenAI partnership, the 2020 GPT-3 license, or the 2023 investment, despite the two having each other's phone numbers.
@mikeisaacnadella on how he feels about the OpenAI investment: "Im very proud that we took the risk and were willing to sponsor this fledgling lab at the time….and start, in fact, all the innovation happening today...and that it has created one of
@mtsliveLIVE TRIAL UPDATE: Satya Nadella testified that Microsoft hosts Elon Musk's xAI model Grok-4 on Azure, a partnership that continued even after Musk sued Microsoft. Nadella said Musk retweeted the announcement and thanked him.
@mtsliveLIVE TRIAL UPDATE: On cross-examination, Satya Nadella confirmed to Musk's attorneys that for-profit activities at a nonprofit are subservient to the nonprofit's mission.
@cointelegraph🚨 UPDATE: Satya Nadella testifies in Elon Musk vs. OpenAI lawsuit over OpenAI’s shift to a for-profit model Elon Musk accuses Microsoft of aiding OpenAI’s move.
@marionawfal🇺🇸 Microsoft's CEO just took the stand in Elon's OpenAI lawsuit. Satya Nadella took the stand today, the third billionaire to testify in weeks, after Elon and Brockman. Altman is up later this week. Closing arguments are Thursday. Elon's
@nypostMicrosoft CEO Satya Nadella defends OpenAI's for-profit status, shares past nerves over Altman ouster
@businessMicrosoft Corp. targeted a $92 billion return from its large early investments in OpenAI, a landmark arrangement that helped usher in the current AI era.
@edludlowRT @business: Microsoft Corp. targeted a $92 billion return from its large early investments in OpenAI, a landmark arrangement that helped…
@firstsquawkThe Information reports that OpenAI could save roughly $97 billion by 2030 as part of its revised agreement with Microsoft.
@firstsquawkOPENAI’s payments to Microsoft under their revenue-sharing deal are now capped at $38 billion, The Information said.
@apples_jimmy“ The companies agreed to cap the total payments at $38 billion, according to a person with knowledge of the agreement “ Was reportedly on the hook for as much as $135 billion through 2030. via the Information
@techmemeSource: new revenue sharing terms cap OpenAI's payments to Microsoft at $38B; they previously could have totaled $135B through 2030 if long-term goals were met (The Information) (Visit Techmeme dot com for the link and full context!)