Microsoft Booked $10 Billion in Revenue From OpenAI Last Quarter as Azure Grew 48%
OpenAI accounted for nearly 11% of Microsoft's $92.3 billion in quarterly revenue, a sign of how tightly the two companies remain linked.
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Microsoft recorded $10 billion in revenue from its commercial arrangements with OpenAI in the quarter ended Sept. 30, 2026, according to a regulatory filing reported by TechCrunch. That is nearly 11% of Microsoft's $92.3 billion in total revenue for the quarter, which was the first of its 2027 fiscal year. Azure revenue grew 48%, and capital spending including finance leases reached $45.2 billion.
Microsoft Building 17, Redmond. Derrick Coetzee, public domain, via Wikimedia Commons.
What the $10 billion includes
TechCrunch reported that the figure covers revenue from Microsoft's commercial arrangements with OpenAI, including revenue-sharing payments. Microsoft has not said how much came from revenue sharing and how much from Azure cloud services.
The $10 billion is recognized revenue, not profit. It is also separate from the accounting for Microsoft's equity stake. In Microsoft's results, the OpenAI investment added $207 million to net income in the quarter. A year earlier, it cut net income by $3.1 billion.
For all of fiscal 2026, revenue from OpenAI was $24.1 billion. At the latest quarterly pace, it would come to about $40 billion a year. Microsoft also reported $7.2 billion in receivables from OpenAI at the end of September, up from $6 billion at the end of June. Those are amounts owed for past transactions, not additional revenue.
The quarter in numbers
Microsoft's own release shows broad growth:
| Metric | Q1 FY2027 | Change Y/Y |
|---|---|---|
| Revenue | $92.3B | +19% |
| Operating income | $45.9B | +21% |
| Net income (GAAP) | $36.6B | +32% |
| Microsoft Cloud revenue | $63.9B | +30% |
| Agents and Infra revenue | $76.8B | +25% |
| Commercial remaining performance obligation | $677B | +73% |
Azure revenue rose 48%. Not all of that growth comes from OpenAI, because Azure also serves enterprises, developers and other AI companies. The Devices and Consumer segment declined 3% to $15.5 billion.
Capex: $45.2 billion, not $39.4 billion
On the earnings call, Microsoft CFO Amy Hood said capital expenditures, including finance leases, were $45.2 billion. She said some expected third-party capacity deliveries had been delayed.
The often-cited $39.4 billion is a narrower figure: cash paid for property and equipment. It leaves out finance leases. Hood said roughly three-quarters of capex went to short-lived assets, mainly CPUs and GPUs. Free cash flow was $18.6 billion.
Hood said she expects capex of more than $50 billion in the fiscal second quarter.
A looser, but still deep, partnership
The two companies began unwinding their once-exclusive arrangement in October 2025. Microsoft gave OpenAI more freedom to use other cloud providers, and in return, OpenAI committed to buy an additional $250 billion in Azure services. Under an April 2026 agreement, OpenAI will keep sharing revenue with Microsoft through 2030, subject to a cap.
OpenAI is widely reported to share 20% of its revenue with Microsoft, but neither company has confirmed that figure. Microsoft's ownership stake slipped from about 25% in June to 24% in September, according to TechCrunch. Microsoft did not say what caused the dilution.
What to watch
The OpenAI figure shows that Microsoft's AI revenue depends heavily on a single partner. That partner is also becoming a competitor for the same customers. Investors will want a breakdown between revenue sharing and Azure consumption in future filings.
They will also be watching whether Azure can keep growing as capex climbs. For more coverage, see our Artificial Intelligence hub.
How we reported this
We checked Microsoft's figures against its Oct. 28, 2026 earnings release. The OpenAI-related figures come from TechCrunch's reporting on Microsoft's filing. The capex figures come from the CFO's remarks on the earnings call. We corrected an earlier draft's capex figure and removed comparisons we could not verify.
Sources
- Microsoft, "Microsoft announces first quarter results," Oct. 28, 2026: https://news.microsoft.com/source/2026/10/28/microsoft-announces-first-quarter-results-2/
- TechCrunch, "Microsoft recorded $10 billion in revenue from OpenAI," Oct. 28, 2026: https://techcrunch.com/2026/10/28/microsoft-recorded-10-billion-in-revenue-from-openai/
- Microsoft FY27 Q1 earnings call, remarks by CFO Amy Hood, Oct. 28, 2026 (transcript via Investing.com): https://in.investing.com/news/stock-market-news/earnings-call-transcript-microsoft-tops-q1-2026-estimates-as-cloud-growth-accelerates-93CH-5662183
- CNBC, "Microsoft (MSFT) Q1 earnings report 2027," Oct. 28, 2026: https://www.cnbc.com/2026/10/28/microsoft-msft-q1-earnings-report-2027.html
DailyMech used AI tools to help research and draft this article; it was fact-checked by our editors.