Microsoft Reports $10 Billion Revenue from OpenAI in Q1 of Fiscal 2027

Microsoft has announced a significant milestone in its financial performance, reporting $10 billion in revenue from its commercial agreements with OpenAI for the quarter ending September 30, 2026. This revenue is part of Microsoft's earnings for the first quarter of fiscal 2027, contributing to a total company revenue of $92.3 billion, which reflects a 19% increase year-over-year.

The revenue from OpenAI represents a notable rise from previous quarters, where figures ranged between $7.5 billion and $7.6 billion. This increase is attributed to ongoing payments linked to the terms of their partnership, which are expected to grow further following a new agreement signed after the quarter closed, involving a $250 billion commitment from OpenAI for Azure services.

Additionally, Microsoft reported a substantial backlog of commercial remaining performance obligations, which surged to $677 billion, driven largely by the OpenAI partnership. This backlog indicates a strong demand for Microsoft's services, outpacing growth in other business segments.

Microsoft holds a 27% stake in OpenAI's for-profit entity, valued at approximately $135 billion following recent assessments. The partnership has evolved significantly, with previous exclusive arrangements restructured to allow OpenAI greater operational flexibility while maintaining Microsoft's financial and intellectual property commitments through 2032.