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OpenAI expects to cut share of revenue it pays Microsoft by 2030

OpenAI plans to reduce the revenue share it pays Microsoft from 20% to 10% by 2030, following a restructuring to convert its for-profit arm into a public benefit corporation while remaining under non-profit control. Microsoft, having invested significantly in OpenAI, seeks to protect its investment amid these changes.

Key points

  • OpenAI currently shares 20% of its top-line revenue with Microsoft.
  • By 2030, OpenAI expects to reduce this share to 10%.
  • The reduction coincides with OpenAI's shift to a public benefit corporation structure.
  • Microsoft has invested substantial funds in OpenAI and holds rights to OpenAI's IP for its AI products.
  • As of now, Microsoft has not approved OpenAI’s proposed changes, ensuring its financial interests are safeguarded.

Why it matters

  • This change reflects trends in corporate structures emphasizing public benefit in tech companies.
  • The news highlights evolving dynamics in AI partnerships and revenue-sharing models among tech giants.
  • With significant investments in AI, companies are increasingly restructuring to better align profit motives with ethical considerations.

OpenAI's shift to lower revenue shares with Microsoft indicates a strategic realignment towards sustainable growth and ethical business practices, as both companies navigate the complex landscape of AI development and investment.