OpenAI has sounded the alarm on its heavy reliance on Microsoft in a private investor document that previews risks for a possible IPO this year. The memo, styled like a prospectus and reviewed by CNBC, warns that the software giant handles “a substantial portion of our financing and compute.”
Shared during last month’s $110 billion funding round from partners including Amazon, Nvidia and SoftBank, the filing outlines threats under sections like “Risks Related to the Transaction” and “Risks Related to our Business.” Bankers are pursuing another $10 billion by late March, sources say anonymously.
Once a 2015 non-profit, OpenAI exploded commercially after launching ChatGPT in late 2022. The tool now draws 900 million weekly users and generated $13.1 billion in 2025 revenue, earning a $730 billion valuation. Microsoft invested $13 billion since 2019, securing Azure exclusivity, with its 27% stake valued at $135 billion after OpenAI’s for-profit shift last October.
Yet competition simmers. Microsoft listed OpenAI as a rival in its 2024 report, alongside Amazon, Apple, Google and Meta. OpenAI has turned to CoreWeave, Google Cloud and Oracle for capacity.
“Our operating results will depend on additional partners aside from Microsoft,” the document states. “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.”
A spokesperson clarified, “This is a standard legal risk factor disclosure, unrelated to any potential IPO prospectus.” They added, “Similar language has been in place for years. Microsoft is and will remain a critical long term partner.”
Other perils include $665 billion in compute commitments through 2030, which “are dynamic and may expand significantly,” plus chip shortages tied to TSMC and China-Taiwan tensions risking “severe disruptions.”
Litigation abounds, from Elon Musk’s three xAI suits (post its SpaceX merger) to 14 user claims alleging ChatGPT caused “mental illness leading to suicide, death or other injury.”
“We are reviewing these cases, in light of our existing industry-leading safeguards and additional efforts, as well as the complex nature of the causes of mental illness,” OpenAI noted.
CEO Sam Altman goes unmentioned, despite past board turmoil. As OpenAI eyes public markets, these factors highlight AI’s precarious edge.