OpenAI Payments Made Up Most of Microsoft's AI Revenue

A Number Microsoft Rarely Shares

Microsoft has shared its complete AI sales figures on just two occasions. The first came for the three months through December 2024, when executives said the unit was running at an annual sales pace of more than $13 billion. The second covered the January-March period, when Microsoft said the annual pace exceeded $37 billion.

When the March quarter closed, CEO Satya Nadella said the company's full-year revenue run rate would reach $37 billion. Last week's fiscal fourth-quarter report did not include an updated total for AI sales.

In a regulatory document published last week, the company reported that OpenAI contributed $24.1 billion in sales during the fiscal year ending in June. That total implies OpenAI represented a majority of Microsoft's total AI revenue in the last fiscal year, probably around 70%.

Microsoft has only occasionally provided full AI revenue figures, and the ones it did give were described as annual paces rather than final totals. The new OpenAI number therefore gives investors a concrete anchor for a business that had mostly been discussed in estimates.

Putting OpenAI in Perspective

Bloomberg's projection assumes the AI division kept expanding at the 123% annual clip Microsoft cited for the three months through March. The $34 billion result is Bloomberg's estimate rather than an official Microsoft figure, but it offers a useful comparison for the newly disclosed OpenAI total.

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The AI category spans all sales tied to AI customers and AI-specific products sold to any customer. A spokesperson verified that the OpenAI figure comprises both direct sales and revenue sharing.

Their deal calls for OpenAI to pay Microsoft for computing capacity, model-building costs, and a percentage of its sales. So the $24.1 billion combines all three types of payments.

Measured against Microsoft's overall revenue, OpenAI's contribution is below 10%. Microsoft says it recorded roughly $51 billion in commercial bookings last quarter, with growth driven by non-AI startup clients. Even so, OpenAI accounted for the largest part of the year's bookings increase.

The concentration also helps explain why investors have wanted a direct number instead of run-rate estimates. Microsoft has tried to reduce its dependence on OpenAI by investing in Anthropic PBC and building its own models, but OpenAI remained the largest AI-related contributor in the fiscal year.

What Investors Want to Know Now

Before that filing, Microsoft had not publicly broken out the complete OpenAI-related revenue total. Olga Usvyatsky, an accounting researcher who leads data analytics firm Nonlinear Analytics, suggested the disclosure could be tied to a possible OpenAI stock-market listing.

That gives investors a concrete baseline for OpenAI-related revenue, but they still need a breakdown to judge what the revenue says about the underlying business. KeyBanc analyst Jackson Ader said a major open issue is whether OpenAI's payments stem mainly from the revenue-sharing arrangement or from cloud computing and other Microsoft services.

"The more of that revenue comes from services to OpenAI rather than the benefits of investment, the more favorably I'm going to look at it," Ader said.

Why the Breakdown Matters

Microsoft's relationship with OpenAI is layered. It is an investor, a cloud provider, and a commercial partner. That makes it hard to tell how much of the $24.1 billion is for cloud services to OpenAI versus a share of OpenAI's own sales. With the disclosure now public, Microsoft investors have a clearer starting point, but the split between services and investment benefits remains central to how they judge the quality of that revenue.

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