Most of Microsoft's AI revenue came from a single source—OpenAI

IT giant Microsoft derives most of its artificial intelligence revenue from a single source—OpenAI, the creator of the ChatGPT chatbot. This was reported by Bloomberg, which analyzed the company’s documents.

Microsoft reported $24.1 billion in revenue from OpenAI for the fiscal year that ended June 30, according to a filing by the tech giant with the U.S. Securities and Exchange Commission (SEC) in late July.

Microsoft CEO Satya Nadella reported that as of the end of March (the end of the third fiscal quarter), the company’s AI business was on track for record annual revenue of $37 billion, thanks to anannual AI run rate of 123%. A Bloomberg analysis suggests that this pace continued into the fourth quarter: if so, Microsoft’s AI business would have generated approximately $34 billion in the past fiscal year. The company did not officially disclose new data on AI sales when it reported its fourth-quarter results in late July.

According to Microsoft documents, OpenAI accounted for more than half—likely around 70%—of Microsoft's AI revenue for the last fiscal year, Bloomberg reports.

Microsoft is OpenAI’s largest investor, having invested more than $13 billion in the company. Under the terms of the agreement between the companies, OpenAI pays Microsoft for computing power, reimburses it for model development costs, and pays a share of its revenue. Microsoft is trying to reduce its dependence on its partner: it has invested in OpenAI’s main competitor, Anthropic, and is developing its own AI models. But investors are still wondering exactly what share of Microsoft’s AI revenue comes from OpenAI, according to Bloomberg. A Microsoft spokesperson confirmed to the news agency that the figure disclosed includes all sales and OpenAI’s share of revenue.

Microsoft has never before disclosed the amount of revenue it generates from OpenAI, Bloomberg notes. This may be related to ChatGPT’s creator’s plans for an IPO, suggested Olga Usvyatski, founder of the data analytics firm Nonlinear Analytics, in a note cited by Bloomberg.

One big question remains: how much of Microsoft’s revenue comes from the revenue-sharing agreement with OpenAI, and how much comes from its cloud computing capabilities and other services, noted KeyBanc analyst Jackson Ader. “The more of that revenue comes from services for OpenAI rather than from investment gains, the more favorably I’ll view it,” he explained (as quoted by Bloomberg).

This article was AI-translated and verified by a human editor