Microsoft (MSFT) Stock Dips as OpenAI Caps Revenue Deal at $38 Billion

TLDR

• OpenAI and Microsoft have agreed to cap total revenue-sharing payments at $38 billion, per The Information
• The deal follows a contract renegotiation last month that gives OpenAI more freedom to partner with other companies, including Amazon and Google
• The cap helps OpenAI clean up its financials ahead of a potential IPO, which could come as early as Q4 2026
• Microsoft retains a non-exclusive license to OpenAI’s intellectual property through 2032 and remains OpenAI’s primary cloud partner
• Microsoft holds a 27% stake in OpenAI, which analysts see as a major source of long-term value

OpenAI and Microsoft ($MSFT) have agreed to cap total revenue-sharing payments at $38 billion, according to a report from The Information citing a person familiar with the arrangement. Neither company has publicly confirmed the details.

Microsoft Corporation, MSFT

Microsoft’s stock was down 0.59% following the news.

The agreement follows a contract renegotiation completed last month. That deal gave OpenAI more room to work with other cloud providers and tech companies, including Amazon (AMZN) andGoogle (GOOG).

Microsoft has invested $13 billion in OpenAI since 2019. That backing helped fuel OpenAI’s rise and drove growth at Azure, Microsoft’s cloud business.

Under the revised terms, Microsoft will remain OpenAI’s primary cloud partner. OpenAI products are expected to launch first on Azure, unless Microsoft is unable or unwilling to meet the required technical needs.

The license Microsoft holds for OpenAI’s models and products now runs through 2032, but it is no longer exclusive.

What the Cap Means for OpenAI

For OpenAI, the $38 billion ceiling brings clarity. Capping the payment obligation reduces uncertainty around future financial commitments — the kind of thing investors want to see before a public listing.

Some OpenAI executives have pointed to a potential IPO as early as the end of 2026, according to The Information. Getting the revenue-sharing structure nailed down ahead of that is a logical step.

The deal also gives OpenAI more flexibility. It can now engage with Amazon Web Services or Google Cloud without running into conflicts with its Microsoft arrangement.

What It Means for Microsoft Investors

For Microsoft, the $38 billion figure works more like a cost ceiling than a revenue limit. It puts a defined boundary on what Microsoft owes OpenAI over the life of the deal.

Microsoft confirmed in April that revenue-sharing payments will continue through 2030, at the same percentage previously agreed, subject to the cap. Azure continues to benefit from strong AI-related demand regardless of how this arrangement evolves.

The bigger potential upside for MSFT investors sits in the IPO itself. Microsoft holds a 27% stake in OpenAI. If OpenAI goes public, that position could become a meaningful financial event for Microsoft.

Analysts at TipRanks currently rate MSFT stock as a Strong Buy, with 33 Buy ratings and two Hold ratings over the last three months. The average price target sits at $559.98, implying upside of around 35.7% from current levels.

Reuters noted it could not independently verify The Information’s reporting. OpenAI and Microsoft did not respond to comment requests.

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