Microsoft CFO: Investment in OpenAI will reduce this quarter's revenue by 1.5 billion dollars
After Microsoft released its quarterly earnings report on Wednesday, Chief Financial Officer Amy Hood said she expects the company's revenue to decrease by $1.5 billion this quarter, mainly due to anticipated losses from OpenAI.
Microsoft has invested nearly $14 billion in OpenAI. However, OpenAI is experiencing significant losses. According to documents cited by The Information earlier this month, the company is expected to lose $5 billion (before deducting stock compensation) and generate revenues of $4 billion this year.
Hood stated that for Microsoft, these losses are accounted for using the equity method. A Microsoft spokesperson explained that this accounting method refers to a company's share of profits or losses from an investment during a given period.
The spokesperson said in an email that additional details "are not because our partnership or investment with OpenAI has changed. Our collaboration with OpenAI continues to yield results as we have established differentiated intellectual property and driven revenue growth momentum."
Although OpenAI is a core part of Microsoft's growth strategy, the company has been mitigating risks after integrating OpenAI's models into multiple products and acting as the exclusive cloud infrastructure provider for this startup. On Tuesday, Microsoft’s GitHub subsidiary announced it would allow developers to use models from Google or startup Anthropic instead of using GPT-4o from OpenAI for its Copilot Chat feature.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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