Microsoft took in $7.6 billion from OpenAI last quarter

Microsoft and OpenAI may have A notoriously rocky relationship But as OpenAI sees unprecedented revenue growth, Microsoft, one of its major investors, stands to benefit hugely.

When the software giant I mentioned Its most recent quarterly earnings, on Wednesday, dropped that rather large nugget: Its net income rose by $7.6 billion from its investment in OpenAI.

OpenAI It is said It has a 20% revenue sharing agreement with Microsoft (although neither company has ever confirmed this publicly). The software giant has invested more than $13 billion in the AI ​​Lab, which is currently looking to raise additional funding worth between $750 billion and $830 billion. Bloomberg reported.

In September, Microsoft and OpenAI renegotiated some terms of their deal when OpenAI was restructured into a corporation. Public benefit company.

As part of the deal, OpenAI agreed to buy Azure services for another $250 billion. It shows that commitment Microsoft Books As “remaining commercial performance obligations,” or contracts entered into by Microsoft that have not yet been paid. These commitments jumped to $625 billion from $392 billion in the previous quarter. Microsoft said 45% of that comes from OpenAI.

Anthropic received high praise in quarterly earnings as well, as it helped boost Microsoft’s expected future revenue in the form of commercial bookings, which grew 230%. In November, Microsoft Announce That it was investing $5 billion in Anthropic and that the AI ​​lab had signed on for $30 billion of Azure computing capacity, with the intention of purchasing more later.

But Microsoft is also spending significant sums to fuel its AI machine. It spent $37.5 billion this quarter on capital expenditures, two-thirds of which was on what Microsoft called “short-term” assets: primarily GPUs and CPUs for its Azure cloud for its artificial intelligence service.

The company reported revenue of $81.3 billion (Wall Street analysts expected $80.27 billion, so this is a solid win), up 17% compared to the same period last year. Microsoft Cloud revenue reached $50 billion this quarter for the first time. All of Microsoft’s business units were up double-digit percentages from the same quarter last year with the exception of Windows devices, which were up 1% (basically flat), and Xbox content and services, which were down 5%.