OpenAI has warned prospective investors that its close relationship with Microsoft poses a potential vulnerability, underscoring the extent to which the software giant underpins its financing and computing infrastructure, as reported by CNBC.
In a detailed financial document resembling an IPO prospectus, the company said Microsoft accounts for “a substantial portion” of both its funding and compute capacity. The disclosure forms part of the broader set of risk factors shared with investors during OpenAI’s latest fundraising round.
The company recently secured $110 billion in backing from strategic partners, including Amazon, NVIDIA and SoftBank, and is in the process of raising an additional $10 billion from a wider pool of investors. The round, which would take the total funding to $120 billion, is expected to close by the end of March, people familiar with the matter told CNBC.
The disclosures offer an early indication of the issues likely to feature in a future public listing, as OpenAI prepares for a potential IPO as soon as this year. Alongside its reliance on Microsoft, the company highlighted risks including heavy capital expenditure requirements, dependence on scarce compute resources and a growing list of legal challenges.
OpenAI said its future performance will depend on its ability to diversify partnerships beyond Microsoft, warning that any change or termination of the relationship could adversely affect its business and financial condition. A spokesperson described the language as standard legal disclosure, adding that Microsoft would remain a critical long-term partner.
Despite their close ties, the two companies are increasingly competing in the fast-growing generative AI market. Microsoft has listed OpenAI as a competitor in recent filings, while OpenAI has begun working with alternative cloud providers, including Oracle and CoreWeave, to meet surging demand.
The company also flagged geopolitical risks, noting that disruption to chipmaker Taiwan Semiconductor Manufacturing Company could severely impact its supply chain. OpenAI estimates it has committed roughly $665 billion in compute-related spending through 2030.
Legal exposure is another concern. The company is facing multiple lawsuits, including claims linked to intellectual property, privacy and product-related harms. It also disclosed ongoing litigation involving Co-Founder Elon Musk and his AI venture.
While emphasising its reliance on key personnel, OpenAI did not specifically name chief executive Sam Altman in the risk disclosures, despite his central role in the company’s leadership.
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