Microsoft Earns $10B from OpenAI in Q1 FY27, ~11% of Revenue
Microsoft reported earning $10 billion from its partnership with OpenAI in the first quarter of fiscal year 2027, accounting for nearly 11% of total revenue. This highlights deep financial ties despite increasing competition for customers. Under a new agreement, OpenAI must continue sharing revenue with Microsoft until 2030, even as it gains freedom to use other cloud providers. Microsoft's stake in OpenAI has also slightly diluted to 24%.
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IT Home reported on October 29 that Microsoft stated in regulatory filings submitted on Wednesday (local time) that the company generated $10 billion in revenue from its commercial partnership with OpenAI—including revenue-sharing payments—during the quarter ending September 30. (Note: At current exchange rates, this equates to approximately RMB 66.805 billion.) This figure accounts for nearly 11% of Microsoft’s total quarterly revenue of $92.3 billion (approximately RMB 616.614 billion at current exchange rates), highlighting the deep financial ties between the two companies even as they increasingly compete for the same customer base. (Note: Microsoft’s fiscal year begins in July; therefore, the quarter ending September 30, 2026, corresponds to the first quarter of its fiscal year 2027.)
For the entire fiscal year 2026, Microsoft recorded $24.1 billion in revenue from business related to OpenAI (approximately RMB 161.001 billion at current exchange rates). Based on the revenue run rate from the latest quarter, Microsoft is projected to earn $40 billion annually from its collaboration with OpenAI (approximately RMB 267.222 billion at current exchange rates).
Microsoft also disclosed that as of the end of September, OpenAI’s outstanding receivables owed to Microsoft totaled $7.2 billion (approximately RMB 48.1 billion), up from $6 billion (approximately RMB 40.083 billion) at the end of June. These amounts represent liabilities incurred from previous transactions and do not constitute new revenue.
It remains unclear how much of the revenue Microsoft receives from OpenAI comes from revenue sharing versus Azure cloud services. In November 2025, TechCrunch cited leaked documents reporting that Microsoft received $865.8 million in net revenue shares from OpenAI during the first nine months of 2025 (approximately RMB 5.784 billion at current exchange rates).
According to reports, under earlier agreements, OpenAI was required to share 20% of its revenue with Microsoft as part of Microsoft’s investment of over $13 billion (approximately RMB 86.847 billion at current exchange rates) in the AI startup. (Neither the AI lab nor Microsoft has publicly confirmed this revenue-sharing ratio.) Under a new agreement reached in April 2026, OpenAI must continue to share revenue with Microsoft within specified limits until 2030, even if it is permitted to collaborate with other cloud service providers.
The two companies began loosening their previously exclusive partnership in October 2025, when Microsoft relaxed restrictions on OpenAI, allowing the startup greater flexibility to engage with other cloud providers. In exchange, under the October 2025 agreement, OpenAI committed to purchasing an additional $250 billion worth of Azure services (approximately RMB 1.67 trillion at current exchange rates).
Microsoft’s equity stake in OpenAI also saw a slight decline, dropping from approximately 25% in June to 24% in September. This continues the trend of gradual dilution following the capital restructuring in October 2025, when Microsoft held about a 27% stake. Microsoft did not specify the reasons for the dilution.