Microsoft Rewrites Its OpenAI Playbook as $190 Billion AI Tab Comes Due

Microsoft is tearing up the old rules of its most valuable partnership. The software giant and OpenAI restructured their financial relationship in April, capping the revenue share flowing from OpenAI to Microsoft at $38 billion through 2030. In exchange, the tech titan gave up its exclusive rights—OpenAI can now peddle its models through rivals like Amazon and Google. The gamble? Microsoft retains the intellectual property rights to OpenAI’s models until 2032 and keeps its 27 percent stake in the for-profit arm. Analysts at Wedbush still count it as a net win, but the deal signals a new chapter as Microsoft’s AI bill approaches astronomical levels.

The company plans to plow $190 billion into artificial intelligence and cloud infrastructure in fiscal 2026—a sum unmatched by any Big Tech peer. Yet roughly $25 billion of that capital spending is being eaten not by new capacity but by surging prices for storage chips and other components, according to finance chief Amy Hood. And even with that record outlay, Microsoft expects to remain capacity-constrained on GPUs, CPUs, and memory through at least the end of 2026.

The justification for such spending comes from Azure. The cloud platform grew 40 percent year-over-year in the third fiscal quarter in constant currency, beating the company’s own forecasts. AI revenue is now running at an annualized pace of more than $37 billion, a 123 percent jump from a year ago. Microsoft holds between 21 and 25 percent of the global cloud market. Recent product updates—Copilot Studio improvements in mid-May and a fresh push to embed AI directly into the Office suite—fit into the broader strategy of "agentic computing" that CEO Satya Nadella has championed.

That operational momentum, however, hasn’t translated into stock-market gains. Microsoft shares trade in Frankfurt at around €347, down roughly 14 percent since January 1 and miles from the 52-week high of €467. The stock has recovered from its March trough of €310, but the relative strength index sits near 53, barely above the 50-day moving average. Investors remain skeptical. Hedge fund TCI recently trimmed its position, flagging long-term risks tied to the dependency on AI. Even though total revenue hit nearly $83 billion in the latest quarter and earnings per share topped estimates, Azure’s growth lags behind Google Cloud’s expansion.

Should investors sell immediately? Or is it worth buying Microsoft?

To balance the books, Microsoft has turned to cost-cutting. A voluntary severance program targeting roughly 7 percent of its U.S. workforce was confirmed in early May, aimed at longtime employees whose combined age and years of service hit at least 70. The move is designed to soften the financial blow as AI expenditures keep climbing.

Meanwhile, legal noise from Elon Musk’s lawsuit against OpenAI simmered in the background. Nadella defended the $13 billion original investment—now more than doubled in return value—during his testimony, noting the partnership has generated around $30 billion in revenue for Microsoft over the past two years, largely from leasing Azure capacity to the AI developer. A court ruling on OpenAI’s non-profit status is expected on May 18.

On the security front, May’s patch day addressed roughly 140 vulnerabilities, including 17 to 20 critical flaws. For the first time in a while, no actively exploited zero-day holes were patched, though researchers urge Microsoft to prioritize renewing Secure Boot certificates before the June 26, 2026 deadline.

Microsoft at a turning point? This analysis reveals what investors need to know now.

Shareholders have a near-term event to watch: the stock goes ex-dividend on May 21, with a regular quarterly payout of $0.91 per share due shortly after. The average analyst price target of $562 suggests significant upside from current levels, but bridging the gap between operational strength and market sentiment may take more than one strong quarter. The next earnings report, due in July, will be the real test.

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Microsoft Stock: New Analysis - 13 May

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