Microsoft Corp. has spent more than US$100 billion on its partnership with OpenAI, a sum that underscores the significance of the software maker's role in the AI company's growth. This figure includes Microsoft's original investments in OpenAI, as well as the costs of building infrastructure and hosting OpenAI's computing, Microsoft deals executive Michael Wetter testified on Monday. It is cumulative through the current fiscal year which ends in June, he said.
Many of these costs were incurred before receiving any revenue, Wetter said. 'We needed to build Azure infrastructure in advance of providing those services to OpenAI,' he said, referring to Microsoft's cloud-computing division.
Background of the Lawsuit
Wetter was testifying as part of Elon Musk's high-profile case against OpenAI and Microsoft in federal court in Oakland, California. In a 2024 lawsuit, Musk accused fellow OpenAI co-founders Sam Altman and Greg Brockman of abandoning the startup's founding mission as a nonprofit to benefit humanity when it took steps to operate as a for-profit business. The world's richest person alleged that Microsoft aided that alleged betrayal.
Microsoft's Investments and Returns
Microsoft invested about US$13 billion in the ChatGPT maker through early 2023 and has been its primary cloud infrastructure provider. Last week, chief executive Satya Nadella said that the company targeted a US$92 billion return from its large early investments in OpenAI. The investments 'worked out well because we took the risk,' Nadella said during his testimony. Since then, OpenAI's valuation has skyrocketed to US$852 billion as of the end of March. As of October, Microsoft's stake in the company was valued at about US$135 billion.
Partnership Dynamics
Microsoft and OpenAI have squabbled over the terms of their partnership and over time have come into more direct competition with one another. As part of OpenAI's restructuring last year, Microsoft received a 27 per cent ownership stake in the startup. OpenAI, Altman, Brockman and Microsoft have all denied wrongdoing, saying Musk's claims are baseless harassment aimed at boosting his own AI startup, xAI, that launched in 2023.
