Microsoft CFO: OpenAI investment will reduce revenue by $1.5 billion this quarter
2024-10-31 01:08
Odaily News After Microsoft released its quarterly earnings report on Wednesday, Chief Financial Officer Amy Hood said she expects the company's revenue to be $1.5 billion lower this quarter, mainly because of expected losses from OpenAI. Microsoft has invested nearly $14 billion in OpenAI. But OpenAI is experiencing huge losses. The company expects to lose $5 billion this year (before stock-based compensation) on revenue of $4 billion, The Information reported earlier this month, citing documents. Hood said that for Microsoft, the loss is accounted for under the equity method. A Microsoft spokesperson said that this accounting method refers to a company's share of the profits or losses of an investee company in a given period. The additional details "are not due to a change in our partnership or investment in OpenAI," the spokesperson said in an email. Our collaboration with OpenAI continues to bear fruit as we build differentiated intellectual property and drive revenue momentum. "While OpenAI is a core part of Microsoft's growth strategy, the company has been avoiding the risk after integrating OpenAI's models into multiple products and acting as the startup's exclusive cloud infrastructure provider. On Tuesday, Microsoft’s GitHub subsidiary said it would allow developers to use models from Google or startup Anthropic to power the Copilot Chat feature, rather than OpenAI’s GPT-4o. (CNBC)
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