TLDR
- Microsoft’s 26.79% stake in OpenAI is now worth an estimated $228 billion, a 17.6x return on its $13 billion investment.
- OpenAI raised $122 billion in February 2026 at an $852 billion post-money valuation — the largest private funding round in history.
- Microsoft recorded $5.9 billion in net gains from its OpenAI stake in the nine months ending March 2026.
- OpenAI has committed to $250 billion in Azure compute purchases, locking in revenue for Microsoft through 2030.
- CEO Satya Nadella testified in court that the OpenAI bet “worked out well because we took the risk,” with Microsoft originally targeting a $92 billion return.
Microsoft put $13 billion into OpenAI between 2019 and 2023. At the time, the company set an internal target of a $92 billion return. That number, disclosed in court documents this week, now looks like a massive underestimate.
MSFT is trading around $408 as of May 12, down over 15% in 2026. But buried in the balance sheet is a stake that changes the picture considerably.
Microsoft holds a 26.79% economic interest in OpenAI on a fully diluted basis. With OpenAI now valued at $852 billion following its record-breaking fundraise, that stake is worth approximately $228.3 billion — around 8% of Microsoft’s entire market cap.
In February 2026, OpenAI closed a $122 billion funding round at a $852 billion post-money valuation. That’s the largest private funding round ever recorded.
In the nine months ending March 31, 2026, Microsoft booked $5.9 billion in net gains from the OpenAI investment. That’s a sharp swing from $2.7 billion in net losses during the same period a year earlier.
The gain wasn’t from OpenAI turning profitable. It came from a one-time accounting event when OpenAI restructured into a Public Benefit Corporation in October 2025. The implied valuation jumped so fast that Microsoft could book the difference as income, even as its ownership percentage dipped slightly.
The Azure Angle
The financial story doesn’t stop at equity. OpenAI has committed to purchasing $250 billion in Azure compute services, with revenue-share payments flowing to Microsoft through 2030.
Microsoft’s AI business is now running at a $37 billion annual revenue rate, up 123% year over year. OpenAI’s cloud spending is a direct contributor to that number.
Microsoft also retains a license to OpenAI’s models and products through 2032, though it is now non-exclusive. OpenAI can now work with other cloud providers, but the commercial ties to Microsoft run deep and long.
What an IPO Could Mean
OpenAI is reportedly targeting a $1 trillion valuation for its IPO. If that lands, Microsoft’s stake would be worth even more than current estimates.
Critically, an IPO would not end the partnership. The Azure commitment and IP licensing run on their own contractual track regardless of OpenAI’s public or private status.
CFO Amy Hood has said Microsoft expects to remain capacity constrained through 2026, with next quarter’s CapEx projected to exceed $40 billion. A sell-down of OpenAI equity post-IPO could help fund that buildout without new debt.
The Musk lawsuit continues in federal court in Oakland. Elon Musk is suing OpenAI co-founders Sam Altman and Greg Brockman, along with Microsoft, for $135 billion, alleging they converted the company from nonprofit to for-profit under false pretenses.
Nadella testified this week that the investments “worked out well because we took the risk.”
MSFT’s 52-week high sits at $555.45. The stock is currently trading about 27% below that level.
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