OpenAI Flags Microsoft as a ‘Risk Factor’ Ahead of Potential IPO, Report Says
Microsoft has backed the company since 2019—well before ChatGPT—investing $13 billion for a 27% stake.
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Image Credit- Diksha Mishra/ MIT Sloan Management Review Middle East
Ahead of its initial public offering, planned for late 2026 or early 2027, OpenAI has said its close ties with Microsoft could pose risks to its business.
In a document resembling an IPO prospectus, the startup shared that the software giant is responsible for “a substantial portion of our financing and compute.” With sections titled “Risks Related to the Transaction” and “Risks Related to our Business” in a financial document, CNBC noted that the document was shared with prospective investors tied to its recent record financing round.
In February, it announced raising $110B in new investment at a $730B pre-money valuation—including $30B from SoftBank, $30B from Nvidia, and $50B from Amazon. Notably, additional financial investors were expected to join as the round progressed.
The document, apart from its relationship with Microsoft, highlighted other risks such as its significant capital expenditures, reliance on compute resources, ongoing litigation with Elon Musk’s xAI, and its unusual structure as a public benefit corporation with the parent entity being the OpenAI Foundation.
OpenAI has had Microsoft as an investor since 2019, much before ChatGPT hit the market. Microsoft also obtained an early commitment from OpenAI to move some of its services exclusively to Azure. To date, Microsoft has invested $13 billion in a 27% ownership stake.
“If Microsoft modifies or terminates its commercial partnership with us, or if we are unable to successfully diversify our business partners, our business, prospects, operating results, and financial condition could be adversely affected,” the company wrote.
An OpenAI spokesperson stated that the document was a standard legal-risk disclosure, not an IPO-related document. “Similar language has been in place for years,” the spokesperson said. “Microsoft is and will remain a critical long-term partner.”
On risks, OpenAI has further mentioned that in case its chip supplier, Taiwan Semiconductor Manufacturing Company, is affected by a regional conflict, a hint to the growing tensions between China and Taiwan, they could face “severe disruptions” to its supply chain.
This comes amid the growing requirement for computational resources to train and run their AI models.
2025 was a landmark year for AI. China’s DeepSeek R1 shattered America’s uncontested AI dominance, OpenAI launched GPT-5, Google released Gemini 3, and Anthropic introduced Claude 4. Among use cases, AI is largely being used for professional development and excellence.
Meanwhile, after Spotify shared that the majority of their senior engineers have not manually written a single line of code since December 2025, OpenAI co-founder and former head of AI at Tesla, Andrej Karpathy, has followed suit.
On a recent podcast, he revealed that his coding habit flipped drastically around the same period. He wrote only 20% of his code, with the majority delegated to an AI agent—a sharp contrast to an early split of 80:20 between the agent and him.
“I don’t think I’ve typed like a line of code probably since December, which is basically an extremely large change,” Karpathy said. “I don’t think a normal person actually realises that this happened or how dramatic it was.”
According to him, agentic AI systems have become efficient and effective in executing multi‑step tasks, writing code, debugging, and coordinating across applications with minimal human intervention.
