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Microsoft's Stake in OpenAI Hinges on $17.3 Billion Profit Target Amid $157 Billion Valuation

Oct 9, 2024, 10:28 PM

Microsoft's profit share stake in OpenAI is structured to give Microsoft 75% of OpenAI's future profits until its $13 billion investment is repaid. This means OpenAI needs to generate $17.3 billion in profits. Despite this, OpenAI has a $157 billion valuation, even though it is projected to incur $44 billion in losses over the next five years. The company recently raised $7 billion but may need to raise more funds to sustain operations beyond 2025. OpenAI is not expected to be profitable until at least 2029, facing competition from major tech companies like Google, Microsoft, NVIDIA, and Amazon.