Microsoft reports $10 billion in revenue from OpenAI last quarter

A new era of revenue

Microsoft recently disclosed that its business relationship with OpenAI generated $10 billion in revenue during the three months ending September 30, 2026. This figure represents approximately 11% of the company's total revenue for that period. It is the first time the company has shared a specific quarterly figure for this arrangement.

The new quarterly total is a notable increase from the previous average of $6 billion per quarter. According to reports from The Next Web, the $10 billion figure actually exceeds the revenue generated by the Xbox division, which brought in $5.4 billion. It also surpassed the $6.6 billion earned from search and advertising.

The filing includes revenue-sharing payments but does not specify how much comes from OpenAI's spending on Azure, Microsoft's cloud platform. Because OpenAI is considered a related party under accounting rules, Microsoft is required to disclose these specific financial ties to its investors.

Shifting partnership dynamics

The relationship between the two companies is evolving into a more flexible arrangement. In October 2025, Microsoft gave up its right of first refusal to supply OpenAI with computing capacity. This move allows OpenAI more freedom to manage its own infrastructure needs as it scales.

Despite this increased independence, OpenAI has still committed to buying another $250 billion of Azure services. The companies also reached an agreement in April 2026 that allows OpenAI to use other cloud providers. This was evidenced by OpenAI recently bringing its models to the Google Cloud platform.

The two entities will continue to share revenue through 2030, though this arrangement is subject to a cap. While there have been unconfirmed reports that OpenAI shares 20% of its revenue with Microsoft, neither company has officially verified that specific percentage in their filings.

Investment and debt

Microsoft's financial stake in OpenAI has seen some movement over the last year. The company owns about 24% of OpenAI, though TechCrunch reported that this stake was about 25% in June and rose to about 27% following a restructuring in October 2025. Microsoft has already paid $12 billion of the $13 billion it committed to invest in the startup.

The debt between the two companies is also growing. The filing shows that OpenAI owed Microsoft $7.2 billion at the end of September, an increase from the $6.0 billion it owed in June. These figures provide a clear picture of the deep financial intertwining between the software giant and the AI developer.

While the revenue is growing, Microsoft is also managing its own internal costs. The company recently cut its 2026 capital spending forecast to $170 billion from an original $175 billion. This adjustment follows some GPU-as-a-Service contracts with outside providers slipping into the second half of the fiscal year.

Diversification and risk

Microsoft leadership is currently focused on ensuring that its AI growth is not overly dependent on a small number of large customers. During a recent earnings call, CEO Satya Nadella stated he did not want Azure's AI business to rely on just a few big clients. He argued that relying on four major customers for a few quarters of growth is not a sustainable business model.

To counter this, Nadella noted that Azure's growth is broad-based across both large and small businesses. He described the company's infrastructure as a fungible fleet that can be dynamically allocated to the highest value opportunities. This strategy aims to spread the risk across various core cloud services and AI infrastructure.

However, the company also issued a warning regarding its reliance on outside AI model makers. Microsoft noted it has limited visibility into or control over how these external models are designed, trained, secured, and tested. This remains a significant point of consideration as the company continues to integrate third-party AI into its ecosystem.