Microsoft CFO says OpenAI investment will cut into profit this quarter

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Microsoft has invested over $13 billion in OpenAI, a bet that’s weighing on the company’s profitability.

Microsoft CFO Amy Hood said the company will record around $1.5 billion in other expense, mainly because of an expected investment loss at OpenAI.

Microsoft has invested close to $14 billion in OpenAI, whose ChatGPT assistant has gone viral and inspired a whole new industry called generative artificial intelligence. The trend has generated billions of dollars in new revenue for Microsoft.But OpenAI is losing bundles of cash. The company expects $5 billion in losses this year, before stock-based compensation, on $4 billion in revenue,

The additional detail is"not due to a change in our partnership or investment in OpenAI," the spokesperson said in an email."Our partnership with OpenAI continues to deliver results, as we build differentiated IP and drive revenue momentum."The earnings call came after Microsoft reported an earnings and revenue beat for the fiscal first quarter. However, the stock slid in extended trading after the company's forecast called for slower-than-expected growth.

 

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