Machine Learning Street Talk OpenAI Burn Rate Explodes Thanks to Microsoft Cloud Charges
Nov 18, 2025
OpenAI's rapid expansion is straining its finances, primarily due to soaring costs tied to Microsoft's cloud services. Leaked figures reveal staggering revenue shared with Microsoft, raising eyebrows about sustainability. The discussion dives into the impact of a 20% profit share arrangement and shifting to alternative cloud providers like AWS and Google. With inference costs skyrocketing, experts ponder the broader implications for profitability in the AI sector. The episode highlights conflicting reports around compute expenses and what this means for the AI bubble.
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Microsoft Revenue Share Skyrockets
- Leaked docs show Microsoft received $493.8M from OpenAI in 2024 and $865.8M in the first three quarters of this year.
- That payout aligns with a widely reported 20% revenue-share tied to Microsoft's multi-billion dollar investment.
Circular Revenue Flows Between Giants
- Microsoft and OpenAI reportedly swap roughly 20% revenue shares in opposite directions for different products.
- That creates opaque flows where each company both pays and receives revenue tied to joint services like Bing and Azure OpenAI.
Net vs Gross Revenue Obscures True Payments
- Reported figures may reflect Microsoft's net revenue share after deducting what Microsoft pays OpenAI for Azure/OpenAI royalties.
- Microsoft does not separately disclose Bing/Azure OpenAI revenue, increasing uncertainty about true cash flows.