Microsoft’s quarterly earnings report revealed a striking boost: a $7.6 billion increase in net income that came directly from its stake in OpenAI. The tech giant, a major investor in the AI startup, has been reaping the rewards as the lab’s revenue soars.
While the companies have a history of a somewhat rocky partnership, OpenAI’s rapid growth has turned the relationship into a lucrative one for Microsoft. The startup reportedly runs a 20 % revenue‑share deal with the software giant—though neither side has publicly confirmed the details. Microsoft has already poured more than $13 billion into the AI lab, which is now eyeing a valuation between $750 billion and $830 billion as it seeks additional funding.
In September, the two firms renegotiated key terms when OpenAI restructured as a public‑benefit corporation. The new agreement commits OpenAI to purchase another $250 billion of Azure cloud services, a commitment that shows up on Microsoft’s books as “commercial remaining performance obligations.” Those obligations surged to $625 billion from $392 billion in the prior quarter, with 45 % attributed to OpenAI.
Microsoft also highlighted its partnership with Anthropic, noting a 230 % jump in commercial bookings that the AI company helped drive. The tech firm announced a $5 billion investment in Anthropic and secured $30 billion of Azure compute capacity, with plans to expand further.
Despite the upside, Microsoft is spending heavily to support its AI ambitions. The company reported $37.5 billion in capital expenditures for the quarter, two‑thirds of which went toward short‑lived assets—primarily GPUs and CPUs for its Azure cloud to power AI workloads.
Overall revenue hit $81.3 billion, beating analysts’ expectations of $80.27 billion and marking a 17 % increase from the same period a year ago. Microsoft Cloud revenue topped $50 billion for the first time. All of the company’s business units grew double‑digit year‑over‑year, except for Windows devices (+1 %) and Xbox content and services, which dipped 5 %.
