On Tuesday, reports suggested that OpenAI plans to slash its revenue-sharing ratio with major investor Microsoft (MS) to less than half its current level. The Information revealed that OpenAI disclosed this strategy during a recent investor briefing. The current revenue-sharing arrangement between OpenAI and Microsoft is estimated at around 20%.
This move is interpreted as a follow-up to OpenAI’s decision to maintain its nonprofit status, abandoning earlier plans to transition into a for-profit entity. However, it remains uncertain whether the negotiations with Microsoft will proceed smoothly.
Since 2019, Microsoft has held the position of OpenAI’s primary sponsor, investing approximately 14.3 billion USD and securing exclusive access to OpenAI’s artificial intelligence technologies.
The Information reports that Microsoft is also seeking extended rights to technology access beyond 2030.
OpenAI’s strategy appears to be maintaining its partnership with Microsoft in the short term while working towards greater technological and financial independence in the long run.
In January, Microsoft and OpenAI announced a joint venture with Oracle Corporation and Japan’s SoftBank to construct AI data centers in the U.S., worth up to 500 billion USD. This announcement included agreements to modify certain contract terms.
An OpenAI spokesperson stated that they are continuing a close collaboration with Microsoft and anticipate finalizing details related to capital procurement issues soon.
OpenAI was founded in 2015 as a nonprofit organization with the mission of developing safe AI. As the need for substantial funding for AI model development and training grew, the company established a for-profit arm called OpenAI Global in 2019.
OpenAI Global operates under a unique capped profit company structure. This model limits investor returns from 2019 to 2024 to 100 times their initial investment. With a new clause allowing for a 20% annual increase in the cap starting this year, the maximum investor returns are set to rise to 120 times the principal in 2023 and potentially reach 248.8 times by 2029.