OpenAI and Microsoft Corp. (NASDAQ:MSFT) have reportedly agreed to cap their total revenue-sharing payments at $38 billion.



This cap could potentially strengthen OpenAI’s long-term appeal to investors as it gears up for a public offering, which might occur as early as the end of this year, reported The Information on Monday.



OpenAI and Microsoft did not immediately respond to Benzinga‘s request for comments.



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<h2>The Renegotiated Terms</h2>



The partnership terms between Microsoft and OpenAI were renegotiated in April, according to which the software giant will remain OpenAI’s primary cloud partner, with OpenAI products set to launch first on Azure unless Microsoft is unable or chooses not to support required capabilities. However, the Sam Altman-led company now has the flexibility to serve its products across any cloud provider, such as Amazon.com (NASDAQ:AMZN) and Google (NASDAQ:GOOGL) (NASDAQ:GOOG).



Microsoft would continue to hold a license to OpenAI’s intellectual property for models and products through 2032, though the license will now be non-exclusive. The revised terms also remove Microsoft’s obligation to pay a revenue share to OpenAI. OpenAI will continue making revenue share payments to Microsoft through 2030 at the same percentage, subject to a total cap.



<h2>Nadella Takes Stand</h2>



On Monday, Microsoft CEO Satya Nadella testified in the Musk v. Altman trial that Elon Musk never raised concerns directly with him about Microsoft's investments in OpenAI violating any special agreements or commitments, reported CNBC. Nadella discussed Microsoft's early partnership with OpenAI, saying the company is &#34;very proud&#34; to have taken a major risk by investing when &#34;no one else was willing.&#34;



A video deposition from Microsoft executive Michael Wetter revealed that Microsoft had recognized about $9.5 billion in revenue from its OpenAI partnership as of March 2025.



Musk had earlier said Microsoft's $10 billion investment in OpenAI convinced him the company was abandoning its nonprofit roots, prompting him to launch a legal probe over fears it was &#34;trying to steal the charity.&#34; Nadella responded that the partnership was always commercial, with Microsoft offering discounted computing resources in exchange for business and marketing benefits.



Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.



Image via Shutterstock



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OpenAI and Microsoft have agreed to cap their revenue-sharing payments at $38 billion, enhancing OpenAI's attractiveness for its upcoming IPO. Microsoft will remain OpenAI's primary cloud partner, with products launching on Azure first, but OpenAI can also serve other cloud providers. Microsoft CEO Satya Nadella expressed pride in their early investment in OpenAI, emphasizing the commercial nature of their partnership. The revised terms eliminate Microsoft's obligation to pay a revenue share to OpenAI, while OpenAI continues to make payments through 2030 at the same percentage, subject to the cap.

- OpenAI and Microsoft Corp. have agreed to cap their total revenue-sharing payments at $38 billion, potentially enhancing OpenAI's attractiveness to investors ahead of a public offering.  
- The revised partnership terms allow OpenAI to serve products across various cloud providers while Microsoft retains a non-exclusive license for OpenAI's intellectual property through 2032.  
- Microsoft's CEO testified that concerns about OpenAI's revenue model were never directly raised by Elon Musk, and that their partnership has always been commercial in nature.

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OpenAI's IPO Dream Gets Massive Boost As Microsoft Reportedly Agrees To $38 Billion Revenue Cap— Nadella Says 'Very Proud' Of Early Bet