Sipu Jha
ChatGPT-maker OpenAI has now warned the prospective investors that its deep reliance on Microsoft could pose a risk to its business, according to a financial document viewed by CNBC. The filing which appears as an IPO prospectus, highlights that Microsoft offers “a substantial portion of our financing and compute,” making the company’s fortunes closely tied to its long‑time partner. This disclosure from OpenAI comes in the heels of OpenAI’s $110 billion funding round announced last month. The funding round was backed by Amazon, Nvidia and Softbank. Along with this, the company is also working with banks to secure additional $10 billion in commitments from a wider pool of investors which is expected to close of the end of this month. Investors have valued OpenAI at $730 billion, reflecting its explosive growth since the launch of ChatGPT in late 2022.
Microsoft made an investment of $13 billion in OpenAI
Microsoft has invested around $13 billion in OpenAI since 2019 and the company holds 27% stake in its non-profit arm which is valued ay $135 billion as of last October. The partnership of the companies also include some exclusive commitments to Microsoft’s Azure cloud, but OpenAI has cautioned that if Microsoft were to “modify or terminate” the relationship, or if OpenAI fails to diversify its partners, its business could be adversely affected.
Despite their close ties, Microsoft listed OpenAI as a competitor in its 2024 annual report, alongside Amazon, Apple, Google, and Meta. OpenAI has also diversified by working with other cloud providers such as CoreWeave, Google, and Oracle to meet surging demand.
OpenAI has flagged multiple risks
Apart from Microsoft, OpenAI has also flagged many other risks which include: * Capital intensity: $665 billion in compute commitments through 2030, with spending expected to rise.* Geopolitical exposure: Dependence on chip suppliers like TSMC, vulnerable to China‑Taiwan tensions.* Legal battles: Multiple lawsuits, including three from co‑founder Elon Musk’s xAI, and at least 14 cases in California alleging harm linked to ChatGPT.* Structure: Its unusual setup as a public benefit corporation under the OpenAI Foundation.With 900 million weekly active users and $13.1 billion in 2025 revenue, OpenAI is preparing for a potential IPO later this year. While the company insists the Microsoft disclosure is a “standard legal risk factor,” the acknowledgment underscores the delicate balance between partnership and competition as OpenAI cements its place at the center of the AI boom.
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