Microsoft and OpenAI have agreed to cap total revenue-sharing payments at $38 billion, according to a report by The Information, marking a pivotal restructuring of one of the most critical partnerships in the artificial intelligence sector. The deal, which follows a contract renegotiation completed last month, grants OpenAI greater freedom to engage with competing cloud providers while still designating Microsoft as its primary cloud partner.
The $38 billion ceiling brings financial clarity to OpenAI as it prepares for a potential initial public offering (IPO) that could occur as early as the fourth quarter of 2026. Capping its payment obligations to Microsoft reduces uncertainty for future investors. Under the revised terms, Microsoft retains a non-exclusive license to OpenAI’s intellectual property through 2032 and remains the launch platform for OpenAI products on Azure unless Microsoft is unable or unwilling to meet technical requirements.
Simultaneously, internal Microsoft planning documents disclosed during CEO Satya Nadella’s testimony in the Musk v. Altman trial revealed that the company once projected a $92 billion return on its cumulative $13 billion investment in OpenAI. The figure appeared in a January 2023 memo from Microsoft President Brad Smith to the board, assuming roughly 20% annual growth after 2025 and a rapid doubling of revenues within four years.
With OpenAI’s latest funding round in March 2026 valuing the company at $852 billion, Microsoft’s 27% stake is now estimated at $220–$230 billion — about 17 to 18 times the original investment. The courtroom disclosures also showed Nadella drawing a historical parallel to Microsoft’s early partnership with IBM, vowing not to let Microsoft become “the next IBM” while OpenAI became “the next Microsoft.”
Microsoft stock dipped 0.59% on the day of the cap news, though analysts at TipRanks maintain a Strong Buy consensus with an average price target of $559.98, implying a 35.7% upside. The company continues to integrate OpenAI’s models across its ecosystem, from Copilot to Azure AI, helping drive $81.3 billion in revenue in its fiscal second quarter, up 17% year-over-year, with a $7.6 billion net gain from OpenAI-related investments.
