"In September, Microsoft and OpenAI renegotiated some of the terms of their deal when OpenAI restructured into public benefit corporation. As part of that deal, OpenAI agreed to buy another $250 billion of Azure services. That commitment shows on Microsoft's books as "commercial remaining performance obligations," or contracts that Microsoft has that have not yet been paid out. Those obligations lept to $625 billion from $392 billion in the previous quarter. Microsoft said that 45% of that is from OpenAI."
"Anthropic got a shout out in the quarterly earnings, too, in helping boost Microsoft's anticipated future revenue in the form of commercial bookings, which grew 230%. In November, Microsoft announced that it was investing $5 billion into Anthropic and the AI lab had signed up for $30 billion of Azure compute capacity, with intent to buy more later. But Microsoft is also spending big to feed the AI machine."
"It spent $37.5 billion in the quarter on capital expenditures, two-thirds of which were for what Microsoft called "short-lived" assets: primarily the GPUs and CPUs for its cloud Azure to serve AI. The company reported $81.3 billion billion in revenue (Wall Street analysts expected $80.27 billion, so that's a solid beat), up 17% over the year ago period."
Microsoft reported a $7.6 billion net income increase tied to its investment in OpenAI and benefits from OpenAI's rapid revenue growth. OpenAI reportedly has a 20% revenue share agreement and Microsoft has invested more than $13 billion, while OpenAI seeks additional funding at a $750–$830 billion valuation. OpenAI agreed to buy $250 billion of Azure services, pushing Microsoft's commercial remaining performance obligations to $625 billion, with 45% attributed to OpenAI. Microsoft also invested $5 billion in Anthropic, which signed $30 billion of Azure capacity, and spent $37.5 billion on capital expenditures, largely GPUs and CPUs, as revenue rose 17% to $81.3 billion.
Read at TechCrunch
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