Microsoft Chairman and Chief Executive Officer Satya Nadella (L), speaks with OpenAI Chief Executive Officer Sam Altman, who joined by video during the Microsoft Build 2025, league successful Seattle, Washington connected May 19, 2025.
Jason Redmond | AFP | Getty Images
Microsoft took a $3.1 cardinal deed to its nett income successful the archetypal 4th owed to the bundle company's hefty concern successful OpenAI.
In its earnings report connected Wednesday, Microsoft said the driblet successful nett reflected an "equity method investment," resulting successful a 41-cent diminution successful net per share. Net income inactive roseate to $27.7 billion, oregon $3.72 per share, from $24.67 billion, oregon $3.30 per share, a twelvemonth ago.
Since archetypal backing OpenAI successful 2019, Microsoft has committed to put $13 cardinal successful the company, with $11.6 cardinal already funded arsenic of the extremity of September, according to a filing.
The announcement comes a time aft OpenAI announced that it completed a recapitalization, cementing its operation arsenic a nonprofit with a controlling involvement successful its for-profit business. The nonprofit, present called the OpenAI Foundation, holds an equity involvement worthy astir $130 cardinal successful its for-profit arm.
Under the caller structure, the OpenAI Foundation volition clasp a 26% involvement successful the for-profit, with 47% held by existent and erstwhile employees and investors.
Microsoft present holds an concern successful the nationalist payment corp that's valued astatine $135 billion, oregon astir 27% of the institution connected an as-converted diluted basis.
Microsoft said that nether the agreement, "OpenAI has contracted to acquisition an incremental $250 cardinal of Azure services," and that Microsoft volition nary longer person the close of archetypal refusal arsenic a compute provider.
On Wednesday's net call, Microsoft CEO Satya Nadella called the narration "one of the astir palmy partnerships and investments our manufacture has adjacent seen," adding that "we proceed to payment mutually from each other's maturation crossed aggregate dimensions."
While Microsoft and OpenAI person been partners for implicit fractional a decade, agelong preceding the motorboat of ChatGPT successful precocious 2022, the companies are progressively competing successful assorted parts of the AI market.
Over a twelvemonth ago, Microsoft added OpenAI to the database of competitors successful the company's latest yearly report, a roster that has included megacap peers Amazon, Apple, Google and Meta.
In that filing, Microsoft identified OpenAI, the creator of the ChatGPT chatbot, arsenic a rival successful AI offerings and successful hunt and quality advertising. Just up of that disclosure, OpenAI announced a prototype of a hunt motor called SearchGPT.
Microsoft has mostly relied connected OpenAI's models to powerfulness AI features successful its cardinal products. But successful August, Microsoft said that it had begun publicly testing a homegrown AI exemplary that could pb to enhancements to its Copilot adjunct for consumers.
Microsoft reported better-than-expected net and nett connected Wednesday. Its large maturation operator remains the Azure cloud, which saw 40% gross expansion, topping estimates.
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