Microsoft's $37B AI Business Depends 70% on OpenAI

Bloomberg reported this week that OpenAI accounted for $24.1 billion of Microsoft's AI revenue in the fiscal year ending in June, close to 70 percent of the total. Satya Nadella said in late March the company's AI business was tracking toward $37 billion a year, which means one partner is carrying most of that number. The money moves through a specific arrangement: OpenAI pays Microsoft for computing power, covers a share of model development costs, and hands over a cut of revenue on top of that.

That level of dependence on a single outside lab is an odd position for Microsoft, a company that built its reputation on locking customers into its own software stack. It also helps explain why Redmond has spent the past year talking up open-weight models and warning that a handful of proprietary AI systems shouldn't be allowed to capture the value generated across entire industries. Nadella has been vocal on this point recently, and how Microsoft frames its relationship with OpenAI, and with rivals building on cheaper alternatives, says something about where that $37 billion figure could be headed next.