Microsoft’s OpenAI bet drives $7.6 billion profit jump as Azure AI revenue surges

Microsoft’s latest quarterly earnings underline just how lucrative its deepening ties with OpenAI have become, with the tech giant reporting a $7.6 billion jump in net income — a boost largely attributed to its AI partnership.

While neither company publicly discloses detailed revenue-sharing terms, OpenAI is widely reported to funnel roughly 20 percent of its revenue to Microsoft. With over $13 billion already invested in the AI lab, Microsoft’s early bet appears to be paying off at scale. Bloomberg reports OpenAI is now seeking fresh capital at a valuation between $750 billion and $830 billion, potentially placing it among the world’s most valuable private companies.

The partnership was restructured in September following OpenAI’s transition into a public benefit corporation. As part of the renegotiated deal, OpenAI committed to purchasing an additional $250 billion in Azure cloud services — a promise now reflected in Microsoft’s growing backlog of contracted revenue.

Microsoft disclosed that its “commercial remaining performance obligations” rose sharply to $625 billion, up from $392 billion in the previous quarter. Notably, about 45 percent of that figure is linked to OpenAI, highlighting the AI lab’s heavy reliance on Microsoft’s cloud infrastructure.

Anthropic ties strengthen Microsoft’s AI footprint

Microsoft’s expanding AI ecosystem also includes rival lab Anthropic. The company said commercial bookings surged 230 percent, aided by its growing partnership with the Claude-maker. In November, Microsoft announced a $5 billion investment in Anthropic, alongside a deal securing $30 billion in Azure compute capacity, with further expansion expected.

The AI push is capital-intensive. Microsoft spent $37.5 billion on capital expenditures during the quarter, with nearly two-thirds directed toward GPUs and CPUs needed to support AI workloads on Azure.

Overall, Microsoft posted $81.3 billion in quarterly revenue, beating Wall Street estimates and marking 17 percent year-on-year growth. Microsoft Cloud revenue surpassed $50 billion in a single quarter for the first time, as most business segments delivered double-digit growth. The exceptions were Windows devices, which remained flat, and Xbox content and services, which fell 5 percent.

As competition in AI accelerates, Microsoft’s earnings suggest its dual bets on OpenAI and Anthropic are not only strategic — but already reshaping its financial trajectory.