# Microsoft Booked $10 Billion From OpenAI in One Quarter, About 11% of Revenue, as Azure Reached $33.2 Billion

Times of AI Desk · 2026-10-29 · Industry

[https://timesof.ai/2026/10/microsoft-fy27-q1-openai-10b-revenue-azure-33b](https://timesof.ai/2026/10/microsoft-fy27-q1-openai-10b-revenue-azure-33b)

> Microsoft's 10-Q for the quarter ended September 30 shows $10.0 billion of revenue from commercial arrangements with OpenAI, including revenue-sharing payments, out of $92.3 billion in total, with OpenAI receivables up to $7.2 billion. Azure revenue rose 48% to $33.2 billion, commercial remaining performance obligation rose 73% to $677 billion, and additions to property and equipment doubled to $39.4 billion. Microsoft does not split the OpenAI revenue by type.

The line in Microsoft's quarter that matters most for the AI business is a related-party disclosure, not a headline number. Microsoft's Form 10-Q says it recorded **$10.0 billion** of revenue from commercial arrangements with OpenAI in the three months to September 30, including revenue-sharing payments. Against total revenue of **$92.3 billion**, that is about 11%, TechCrunch calculated, from a single customer and partner in which Microsoft holds an equity stake.

## The OpenAI exposure

The filing describes Microsoft's OpenAI investment as an equity-method holding of approximately **24%** on an as-converted basis, which makes OpenAI a related party and triggers the disclosure. Accounts receivable from OpenAI rose to **$7.2 billion** at September 30 from $6.0 billion at June 30. Microsoft has funded **$12.0 billion** of its **$13.0 billion** total funding commitment.

Microsoft does not say how the $10 billion splits between services OpenAI buys from it and revenue-sharing payments. TechCrunch reported that Microsoft's annual report showed $24.1 billion of OpenAI revenue for fiscal 2026, and that the stake had been about 25% in June.

The investment itself added to profit this time. The 10-Q shows **$272 million** of net gains from OpenAI in other income, which Microsoft says raised net income by $207 million and diluted earnings per share by $0.03. A year earlier, OpenAI-related losses cut net income by $3.1 billion.

That concentration sits against what we reported this month about OpenAI's own numbers: Bloomberg said OpenAI told investors its [annualized revenue was about $50 billion at the end of September](https://timesof.ai/2026/10/openai-50b-annualized-revenue-vs-70b-signal).

## The quarter

Revenue rose 19% to $92.3 billion and operating income 21% to $45.9 billion, according to Microsoft's release. Net income was $36.6 billion, or $4.92 a share; excluding the OpenAI gains, $36.4 billion, or $4.89.

Azure revenue was **$33.2 billion**, up 48% from $22.4 billion, under a new segment structure Microsoft adopted this fiscal year. Reuters reported that this beat a Visible Alpha consensus of $32.84 billion and that the shares rose about 6% in extended trading. Commercial remaining performance obligation rose 73% to **$677 billion**, which Microsoft expects to recognise about 30% of over the next 12 months.

Spending kept pace. Additions to property and equipment were **$39.4 billion**, double the $19.4 billion a year earlier, and the 10-Q lists **$364.6 billion** of mostly data-centre leases signed but not yet commenced, starting between fiscal 2027 and 2034. The filing, published two days after Microsoft opened a [voluntary exit offer](https://timesof.ai/2026/10/microsoft-voluntary-exit-offer-60000-eligible) to some staff, says total headcount was down 2% from a year earlier.

## Limits

- The $10.0 billion combines all commercial arrangements with OpenAI; Microsoft gives no split between Azure services and revenue share, and no margin.
- The 11% share is TechCrunch's calculation from the reported totals; the fiscal 2026 figure is as TechCrunch reported it from the annual report, which we did not reopen.
- Prior-year segment and Azure figures are recast under the new structure, so comparisons with older reports are not like-for-like.
- We read the 10-Q through StockTitan's full-text copy; Microsoft's own investor-site file did not load for us.

## Sources

- [Microsoft: FY27 first-quarter earnings release, Exhibit 99.1 (SEC, October 28, 2026)](https://www.sec.gov/Archives/edgar/data/789019/000119312526436122/msft-ex99_1.htm)
- [Microsoft Form 10-Q for the quarter ended September 30, 2026, full text as carried by StockTitan (filed October 28, 2026)](https://www.stocktitan.net/sec-filings/MSFT/10-q-microsoft-corp-quarterly-earnings-report-ae50bd6b9dde.html)
- [TechCrunch: Microsoft recorded $10 billion in revenue from OpenAI (October 28, 2026)](https://techcrunch.com/2026/10/28/microsoft-recorded-10-billion-in-revenue-from-openai/)
- [Reuters via Investing.com: Microsoft beats quarterly cloud revenue estimates (October 28, 2026)](https://www.investing.com/news/stock-market-news/microsoft-beats-quarterly-cloud-revenue-estimates-4980616)