OpenAI has agreed to cap the total revenue it shares with Microsoft Corp (NASDAQ:MSFT) at $38 billion through 2030, down sharply from a prior arrangement that could have generated as much as $135 billion in cumulative payments for the software giant, according to people familiar with the matter.
Under the original agreement, OpenAI was set to pay Microsoft 20% of its revenue through 2030, with those payments potentially continuing until artificial general intelligence was formally declared.
The revised structure preserves the 20% revenue share rate but places a hard ceiling on total payments.
Based on OpenAI's internal revenue projections, the cap is expected to be reached around 2028.
The revision was part of a broader renegotiation finalized in April 2026, which also allows OpenAI to sell its models through any cloud provider, including AWS, Google Cloud, and Oracle, ending Microsoft's exclusivity over OpenAI's compute and distribution.
The deal carries a near-term twist for Microsoft: while OpenAI benefits by reducing its long-term payment obligations, the renegotiated structure eliminates OpenAI's previous option to defer certain payments to 2032. As a result, OpenAI is now expected to pay roughly $6 billion of its projected $30 billion in revenue to Microsoft this year, up from approximately $4 billion previously anticipated, meaning Microsoft's cash inflows from the partnership are actually accelerated in the short term even as the long-run upside is curtailed.
Wedbush analysts called the revised arrangement a net positive for Microsoft, noting that the company secured several structural wins in exchange for capping its long-tail optionality. Among the most significant, Microsoft locked in intellectual property rights to OpenAI's models and products through 2032 regardless of when AGI is declared, removing what had been an open-ended risk in the original agreement.
Microsoft also retains its primary cloud relationship with OpenAI and its equity stake in the company, preserving exposure to OpenAI's growth as it moves toward a potential initial public offering.
The renegotiation also removes a meaningful drag on Azure's AI revenue economics, analysts noted. Under the prior arrangement, Microsoft had been sharing revenue with OpenAI from Azure sales of OpenAI models to cloud customers, which is now gone.
Wedbush framed the restructured partnership as consistent with Microsoft's broader push to reduce its dependence on a single concentrated commercial arrangement while maintaining strategic alignment with OpenAI. The bank highlighted Microsoft's expanding in-house Copilot ecosystem, its development of proprietary AI models, and its integration of Anthropic models into Microsoft 365 productivity tools as evidence of that diversification.
The analysts cited Microsoft's $627 billion commercial remaining performance obligation backlog and an AI annual revenue run rate of $37 billion, up 123% year-over-year in its most recent quarter, as indicators of robust underlying demand.
Wedbush maintained its Outperform rating and $575 price target on Microsoft shares.