Microsoft Earns $10 Billion From OpenAI in Fiscal Q1 2027
Microsoft generated $10 billion from OpenAI in fiscal Q1 2027, nearly 11% of revenue, as receivables rose and its ownership stake slipped to 24% by September.
Summary
Microsoft disclosed in an October 28, 2026 regulatory filing that commercial arrangements with OpenAI, including revenue-sharing payments, generated $10 billion in the quarter ended September 30. That equaled nearly 11% of Microsoft’s $92.3 billion quarterly revenue. Because its financial year begins in July, the period was fiscal 2027’s first quarter. OpenAI-related revenue totaled $24.1 billion in fiscal 2026, while the latest quarterly pace would produce $40 billion annually. The split between Azure services and revenue sharing remains unclear. Leaked documents indicated $865.8 million in net revenue-sharing payments during 2025’s first nine months.
OpenAI reportedly shares 20% of revenue after Microsoft invested more than $13 billion, although neither company has confirmed the percentage. An April 2026 agreement keeps capped payments running through 2030 while allowing OpenAI to use competing clouds. Microsoft loosened the once-exclusive partnership in October 2025, and OpenAI committed to purchase another $250 billion of Azure services. OpenAI’s outstanding receivables rose from $6 billion in June to $7.2 billion in September, representing previous transactions rather than new revenue. Microsoft’s OpenAI stake fell from about 25% to 24% during that period, continuing its decline from roughly 27% after the October 2025 recapitalization; Microsoft did not explain the dilution. The relationship remains financially immense even as both companies increasingly pursue the same customers.
Positives
- $10 billion from OpenAI supplied nearly 11% of Microsoft’s $92.3 billion fiscal first-quarter revenue.
- $24.1 billion in fiscal 2026 OpenAI-related revenue demonstrates the partnership’s already substantial annual contribution.
- $40 billion is the annualized value of Microsoft’s OpenAI business at the latest quarterly pace.
- $250 billion in additional Azure purchases was committed by OpenAI when exclusivity loosened in October 2025.
- Revenue sharing continues through 2030 under the April 2026 agreement, subject to a cap.
Risks & concerns
- $7.2 billion in OpenAI receivables remained outstanding in September, rising from $6 billion in June.
- Microsoft and OpenAI increasingly compete for the same customers despite their extensive financial dependence.
- 24% ownership in September was down from about 25% in June and roughly 27% after the October 2025 recapitalization.
- Microsoft did not explain the cause of its OpenAI stake dilution.
- The division of Microsoft’s $10 billion between Azure services and revenue-sharing payments remains undisclosed.