OpenAI Caps Microsoft Payments at $38B, Ends Exclusivity

OpenAI and Microsoft renegotiated their commercial agreement, capping OpenAI’s revenue-share payments to Microsoft at $38 billion through 2030. The revised deal changes Microsoft’s status from an exclusive partner to a non-exclusive intellectual property licensee, with the license running through 2032. Azure remains OpenAI’s primary cloud provider, and existing Azure integrations are expected to continue under the new terms. The new contract also gives OpenAI explicit freedom to engage other cloud providers for hosting and deployment.

Before the revision, projections that assumed no cap estimated payments to Microsoft could have reached about $135 billion, so the cap reduces those projected payments by roughly $97 billion. Microsoft has reported about $13 billion in total investment in OpenAI across multiple funding rounds; the capped payments exceed that reported investment. The license allows Microsoft to continue using OpenAI technology in products such as Copilot and in Azure AI integrations through 2032.

The earlier revenue-share structure reflected the financial arrangement tied to Microsoft’s early funding and cloud support. Under the new terms, Microsoft retains commercial access to OpenAI models while OpenAI gains contractual flexibility to work with other cloud providers. The cap fixes the maximum payments through 2030, and the license term through 2032 will inform product integration and cloud strategy decisions for both companies.

Neither company disclosed detailed revenue-share formulas or the exact mechanism that enforces the cap. The agreement maintains core operational ties between the two firms but alters the long-term payment limits and exclusivity conditions. Terms after 2030 for revenue sharing and after 2032 for licensing were not specified.