OpenAI may make a ‘not-so-happy’ Microsoft announcement, a flat 50% cut

OpenAI intends to significantly reduce the percentage of revenue it shares with Microsoft, its major investor, according to financial projections recently shared with investors. The ChatGPT maker reportedly plans to cut Microsoft's share from the current 20% to approximately 10% by the end of this decade.The Information reported Tuesday that OpenAI has communicated these plans to both current and potential investors through private documents.This development comes just one day after OpenAI announced it would maintain nonprofit control while restructuring its for-profit arm as a public benefit corporation."We continue to work closely with Microsoft, and look forward to finalizing the details of this recapitalization in the near future," an OpenAI spokesperson told The Information.Microsoft remains a key holdout in approving OpenAI's proposed corporate restructuring, Bloomberg reported. The Redmond giant, which has invested $13.75 billion in the AI startup, is reportedly seeking assurances that the new structure adequately protects its substantial investment.The current revenue-sharing agreement between the companies extends through 2030, with Microsoft receiving exclusive access to OpenAI's APIs on its Azure cloud platform. The deal also grants Microsoft rights to integrate OpenAI's intellectual property into its AI products.Beyond the revenue split reduction, OpenAI is reportedly in active negotiations with Microsoft regarding other aspects of their partnership, including equity stakes and future licensing arrangements."We made the decision for the nonprofit to stay in control after hearing from civic leaders and having discussions with the offices of the Attorneys General of California and Delaware," OpenAI said in its Monday announcement regarding the restructuring.Despite the potential reduction in revenue sharing, OpenAI CEO Sam Altman has indicated that SoftBank remains committed to its previously announced $30 billion investment. How Microsoft responds to these proposed changes remains a critical factor in OpenAI's restructuring plans and future financing strategy.Neither Microsoft nor OpenAI responded to requests for comment on the reported revenue share reduction.