Microsoft Reports OpenAI Lost $11.5B Last Quarter
Microsoft Discloses OpenAI's Massive Quarterly Loss
New financial documents from Microsoft have revealed substantial losses at its AI partner OpenAI during the last quarter. According to filings submitted to the U.S. Securities and Exchange Commission, OpenAI suffered a net loss of $11.5 billion for the quarter ending September 30, 2025.
Financial Impact on Microsoft
The report shows Microsoft uses equity accounting methods, meaning OpenAI's financial performance directly affects its own bottom line. As a result:
- Microsoft's net income was reduced by $3.1 billion
- The company maintains a 27% stake in OpenAI
- Calculations suggest OpenAI's total loss reached approximately $11.5 billion
This comes despite OpenAI reporting $4.3 billion in revenue during the first half of 2025.
Microsoft's Overall Position Remains Strong
While absorbing significant losses from its AI investment:
- Microsoft posted $27.7 billion in quarterly net income
- The company emphasized these losses haven't materially impacted its financial position
- Investments in AI continue as a strategic priority
The filings confirm OpenAI has completed its transition to a for-profit company structure, suggesting confidence in future growth potential despite current challenges.
Industry Implications
The disclosure highlights:
- The enormous costs associated with developing cutting-edge AI systems
- The risks major tech firms face when backing ambitious AI startups
- Ongoing confidence in AI's long-term commercial viability despite short-term losses
Neither Microsoft nor OpenAI provided additional commentary beyond the financial disclosures.
Key Points:
- 💰 Massive Losses: OpenAI reported $11.5B quarterly loss; Microsoft absorbed $3.1B (27% stake)
- 📊 Resilient Performance: Despite impact, Microsoft earned $27.7B net income last quarter
- 🔮 Future Focus: Transition to for-profit structure signals belief in long-term AI profitability
