Yeah, I think this has really been an amazing partnership through every phase. We had kind of no idea where it was all going to go when we started, as Satya said. But I think this is one of the great tech partnerships ever, and without certainly Microsoft and particularly Satya's early conviction, we would not have been able to do this.
What a week. Great to see you both. Sam, how's the baby?
Baby is great. That's the best thing ever, man. Every cliche is true, and it is the best thing ever.
Hey Satya, with all the time you've spent together, have you given him any dad tips?
I said just enjoy it. It's so awesome. We had our children so young, and I wish I could redo it. So in some sense, it's the most precious time, and as they grow, it's just so wonderful. I'm so glad Sam is doing it older, but I do think sometimes, man, I wish I had the energy when I was 25. That part's harder.
No doubt about it. What's the average age at OpenAI, Sam? Any idea?
It's young. It's not crazy young. Not like most Silicon Valley startups. I don't know, maybe low 30s average.
Are babies trending positively or negatively?
Babies trending positively.
That's good. Well, you guys, such a big week. I was thinking about I started at Nvidia's GTC, just hit $5 trillion. Google, Meta, Microsoft, Satya, you had your earnings yesterday, and we heard consistently not enough compute. We got rate cuts on Wednesday. The GDP's tracking near 4%. And then I was just saying to Sam, the president's cut these massive deals in Malaysia, South Korea, Japan, sounds like with China. Deals that really provide the financial firepower to re-industrialize America. $80 billion for new nuclear fission, all the things that you guys need to build more compute. But certainly what wasn't lost in all of this was you guys had a big announcement on Tuesday that clarified your partnership. Congrats on that. I thought we'd just start there. I really want to break down the deal in simple plain language to make sure I understand it. We'll start with your investment, Satya. Microsoft started investing in 2019, has invested in the ballpark of $134 billion into OpenAI, and for that you get 27% of the business ownership on a fully diluted basis. I think it was about a third, and you took some dilution over the course of last year with all the investment. Does that sound about right in terms of ownership?
Yeah, it does. But I would say before even our stake in it, Brad, I think what's pretty unique about OpenAI is the fact that as part of OpenAI's process of restructuring, one of the largest nonprofits gets created. Let's not forget that at Microsoft, we are very proud of the fact that we were associated with two of the largest nonprofits, the Gates Foundation and now the OpenAI Foundation. So that's the big news. We obviously are thrilled. It's not what we thought. And as I said to somebody, it's not like when we first invested our billion dollars that, oh, this is going to be the 100 bagger that I'm going to be talking about to VCs, but here we are. We are very thrilled to be an investor and an early backer. And it's a testament to what Sam and team have done. They obviously had the vision early about what this technology could do and they ran with it and executed in a masterful way.
Yeah, I think this has really been an amazing partnership through every phase. We had kind of no idea where it was all going to go when we started, as Satya said. But I think this is one of the great tech partnerships ever, and without certainly Microsoft and particularly Satya's early conviction, we would not have been able to do this. I don't think there were a lot of other people that would have been willing to take that kind of a bet given what the world looked like at the time. We didn't know exactly how the tech was going to go. We didn't know at all how the tech was going to go. We just had a lot of conviction in this one idea of pushing on deep learning and trusting that if we could do that, we'd figure out ways to make wonderful products and create a lot of value and also, as Satya said, create what we believe will be the largest nonprofit ever. And I think it's going to do amazingly great things. I really like the structure because it lets the nonprofit grow in value while the PBC is able to get the capital that it needs to keep scaling. I don't think the nonprofit would be able to be this valuable if we didn't come up with the structure and if we didn't have partners around the table that were excited for it to work this way. But I think it's been more than six years since we first started this partnership, and a pretty crazy amount of achievement for six years, and I think much more to come. I hope that Satya makes a trillion dollars on the investment, not hundred billion, whatever it is.
Well, as part of the restructuring, you guys talked about it. You have this nonprofit on top and a public benefit corp below. It's pretty insane. The nonprofit is already capitalized with $130 billion of OpenAI stock. It's one of the largest in the world out of the gates. It could end up being much larger. The California Attorney General said they're not going to object to it. You already have this $130 billion dedicated to making sure that AGI benefits all of humanity. You announced that you're going to direct the first $25 billion to health and AI security and resilience. Sam, first let me just say, as somebody who participates in the ecosystem, kudos to you both. It's incredible this contribution to the future of AI. But Sam, talk to us a bit about the importance of the choice around health and resilience. And then help us understand how do we make sure that you get maximal benefit without it getting weighed down as we've seen with so many nonprofits with its own political biases.
Yeah. First of all, the best way to create a bunch of value for the world is hopefully what we've already been doing, which is to make these amazing tools and just let people use them. And I think capitalism is great. I think companies are great. I think people are doing amazing work getting advanced AI into the hands of a lot of people and companies. They're doing incredible things. There are some areas where I think market forces don't quite work for what's in the best interest of people, and you do need to do things in a different way. There are also some new things with this technology that just haven't existed before, like the potential to use AI to do science at a rapid clip, like truly automated discovery. And when we thought about the areas we wanted to first focus on, clearly if we can cure a lot of disease and make the data and information for that broadly available, that would be a wonderful thing to do for the world. And then on this point of AI resilience, I do think some things may get a little strange, and they won't all be addressed by companies doing their thing. So as the world has to navigate through this transition, if we can fund some work to help with that, and that could be cyber defense, AI safety research, economic studies, all of these things, helping society get through this transition smoothly. We're very confident about how great it can be on the other side, but I'm sure there will be some choppiness along the way.
Let's keep busting through the deal. So models and exclusivity. Sam, OpenAI can distribute its leading models on Azure, but I don't think you can distribute them on any other leading big clouds for seven years until 2032, but that would end earlier if AGI is verified. We can come back to that, but you can distribute your open source models, Sora, agents, codecs, wearables, everything else on other platforms. So Sam, I assume this means no ChatGPT or GPT-6 on Amazon or Google.
No. So, we have a... First of all, we want to do lots of things together to help create value for Microsoft. We want them to do lots of things to create value for us. And there are many things that'll happen in that category. We are keeping what Satya termed once, and I think it's a great phrase, stateless APIs on Azure exclusively through 2030. And everything else we're going to distribute elsewhere, and that's obviously in Microsoft's interest too. So we'll put lots of products in lots of places, and then this thing we'll do on Azure, and people can get it there or via us. And I think that's great.
And then the rev share, there's still a rev share that gets paid by OpenAI to Microsoft on all your revenues that also runs until 2032 or until AGI is verified. So let's just assume for the sake of argument, I know this is pedestrian, but it's important that the rev share is 15%. So that would mean if you had $20 billion in revenue, you're paying $3 billion to Microsoft, and that counts as revenue to Azure. Satya, does that sound about right?
Yeah, we have a rev share, and I think as you characterized it, it's either going to AGI or till the end of the term. And I actually don't know exactly where we count it, quite honestly, whether it goes into Azure or somewhere else. That's a good question for Amy.
Given that both exclusivity and the rev share end early in the case AGI is verified, it seems to make AGI a pretty big deal. And as I understand it, if OpenAI claimed AGI, it sounds like it goes to an expert panel. And you guys basically select a jury who's got to make a relatively quick decision whether or not AGI has been reached. Satya, you said on yesterday's earnings call that nobody's even close to getting to AGI and you don't expect it to happen anytime soon. You talked about this spiky and jagged intelligence. Sam, I've heard you perhaps sound a little bit more bullish on when we might get to AGI. So I guess the question is to you both. Do you worry that over the next two or three years we're going to end up having to call in the jury to effectively make a call on whether or not we've hit AGI?
I realize you got to try to make some drama between us here. I think putting a process in place for this is a good thing to do. I expect that the technology will take several surprising twists and turns, and we will continue to be good partners to each other and figure out what makes sense.
That's well said. I think that's one of the reasons why I think this process we put in place is a good one. And at the end of the day, I'm a big believer in the fact that intelligence capability wise is going to continue to improve, and our real goal, quite frankly, is how do you put that in the hands of people and organizations so that they can get the maximum benefits. And that was the original mission of OpenAI that attracted me to OpenAI and Sam and team, and that's kind of what we plan to continue on. Brad, to say the obvious, if we had super intelligence tomorrow, we would still want Microsoft's help getting this product out into people's hands.
Of course. Yeah. No, it again, I'm asking the questions I know that are on people's minds, and that makes a ton of sense to me. Obviously, Microsoft is one of the largest distribution platforms in the world. You guys have been great partners for a long time. But I think it dispels some of the myths that are out there. But let's shift gears a little bit. Obviously, OpenAI is one of the fastest growing companies in history. Satya, you said on the pod a year ago that every new phase shift creates a new Google, and the Google of this phase shift is already known and it's OpenAI. And none of this would have been possible had you guys not made these huge bets. With all that said, OpenAI's revenues are still a reported $13 billion in 2025. And Sam, on your livestream this week, you talked about this massive commitment to compute, right? $1.44 trillion over the next four or five years with big commitments: $500 million to Nvidia, $300 million to AMD, and Oracle $250 billion to Azure. So I think the single biggest question I've heard all week hanging over the market is how can a company with $13 billion in revenues make $1.44 trillion of spend commitments? And you've heard the criticism, Sam.
First of all, we're doing well more revenue than that. Second of all, Brad, if you want to sell your shares, I'll find you a buyer. I think there's a lot of people who would love to buy OpenAI shares. I don't think you, including myself, people who talk with a lot of breathless concern about our compute stuff or whatever, that would be thrilled to buy shares. So I think we could sell your shares or anybody else's to some of the people who are making the most noise on Twitter about this very quickly. We do plan for revenue to grow steeply. Revenue is growing steeply. We are taking a forward bet that it's going to continue to grow, and that not only will ChatGPT keep growing, but we will be able to become one of the important AI clouds, that our consumer device business will be a significant and important thing, that AI that can automate science will create huge value. So there are not many times that I want to be a public company, but one of the rare times it's appealing is when those people are writing these ridiculous 'OpenAI is about to go out of business' articles. I would love to tell them they could just short the stock, and I would love to see them get burned on that. But we carefully plan, we understand where the technology capability is going to grow and how the products we can build around that and the revenue we can generate. We might screw it up. This is the bet that we're making, and we're taking a risk along with that. A certain risk is if we don't have the compute, we will not be able to generate the revenue or make the models at this kind of scale.
Exactly. And let me just say one thing, Brad. As both a partner and an investor, there has not been a single business plan that I've seen from OpenAI that they have put in and not beaten it. So in some sense, this is the one place where in terms of their growth and even the business, it's been unbelievable execution, quite frankly. Obviously, everyone talks about all the success in the usage, but even the business execution has been pretty unbelievable.
I heard Greg Brockman say on CBC a couple weeks ago, right? If we could 10x our compute, we might not have 10x more revenue, but we'd certainly have a lot more revenue simply because of lack of compute power.
Yeah, it's just really wild when I look at how much we are held back. In many ways, we've scaled our compute probably 10x over the past year, but if we had 10x more compute, I don't know if we'd have 10x more revenue, but I don't think it'd be that far.
And we heard this from you as well last night, Satya, that you were compute constrained and growth would have been higher even if you had more compute. So help us contextualize, Sam, how compute constrained do you feel today, and when you look at the buildout over the next two to three years, do you think you'll ever get to the point where you're not compute constrained?
We talk about this question of is there ever enough compute a lot. I think the best way to think about this is like energy or something. You can talk about demand for energy at a certain price point, but you can't talk about demand for energy without talking about different demand at different price levels. If the price of compute per unit of intelligence, however you want to think about it, fell by a factor of 100 tomorrow, you would see usage go up by much more than 100, and there'd be a lot of things that people would love to do with that compute that just make no economic sense at the current cost, but there would be new kind of demand. On the other hand, as the models get even smarter and you can use these models to cure cancer or discover novel physics or drive a bunch of humanoid robots to construct a space station or whatever crazy thing you want, then maybe there's huge willingness to pay a much higher cost per unit of intelligence for a much higher level of intelligence that we don't know yet, but I would bet there will be. So when you talk about capacity, it's like a cost per unit and capability per unit, and you have to kind of without those curves, it's not a super well-specified problem.
Yeah. I mean, I think the one thing that Sam you've talked about which I think is the right way to think about is that if intelligence is a log of compute, then you try and really make sure you keep getting efficient, and so that means the tokens per dollar per watt, and the economic value that the society gets out of it is what we should maximize and reduce the costs. And so that's where the Jevons paradox point is, which is you keep reducing it, commoditizing in some sense intelligence, so that it becomes the real driver of GDP growth all around.
Unfortunately, it's something closer to log of intelligence equals log of compute. But we may figure out better scaling laws and we may figure out how to beat this.
We heard from both Microsoft and Google yesterday. Both said their cloud businesses would have been growing faster if they had more GPUs. I asked Jensen on this pod if there was any chance over the next five years we would have a compute glut, and he said it's virtually non-existent in the next two to three years. I assume you guys would both agree with Jensen that while we can't see out five, six, seven years, certainly over the next two to three years, for the reasons we just discussed, it's almost a non-existent chance that you have excess compute.
Well, I mean, I think the cycles of demand and supply in this particular case, you can't really predict. The secular trend is what Sam said, which is at the end of the day, the biggest issue we are now having is not a compute glut, but it's power and the ability to get the builds done fast enough close to power. So if you can't do that, you may actually have a bunch of chips sitting in inventory that I can't plug in. In fact, that is my problem today. It's not a supply issue of chips. It's actually the fact that I don't have warm shells to plug into. And so how some supply chain constraints emerge is tough to predict because the demand is just going, it's tough to predict. I wouldn't want to be sitting here saying, 'Oh my god, we're less short on compute,' because we were not that good at being able to project out what the demand would really look like. And by the way, worldwide, it's one thing to talk about one segment in one country, but it's about really getting it out to everywhere in the world. So there will be constraints, and how we work through them is going to be the most important thing. It won't be a linear path for sure.
There will come a glut for sure, and whether that's in two to three years or five to six, I can't tell you, but it's going to happen at some point, probably several points along the way. There's something deep about human psychology here and bubbles. And also, as Satya said, it's such a complex supply chain, weird stuff gets built, the technological landscape shifts in big ways. So if a very cheap form of energy comes online soon at mass scale, then a lot of people are going to be extremely burned with existing contracts they've signed. If we can continue this unbelievable reduction in cost per unit of intelligence, let's say it's been averaging like 40x per year, that's a very scary exponent from an infrastructure buildout standpoint. Now, again, we're taking the bet that there will be a lot more demand as that gets cheaper, but I have some fear that we keep going with these breakthroughs and everybody can run like a personal AGI on their laptop, and we just did an insane thing here. Some people are going to get really burned, like has happened in every other tech infrastructure cycle at some points along the way.
I think that's really well said, and you have to hold those two simultaneous truths. We had that happen in 2001, and yet the internet became much bigger and produced much greater outcomes for society than anybody estimated in that period of time.
Yeah. But I think that the one thing that Sam said is not talked about enough, which is the current optimizations that OpenAI has done on the inference stack for a given GPU. I mean, it's kind of like we talk about the Moore's law improvement on one end, but the software improvements are much more exponential than that.
Someday we will make an incredible consumer device that can run a GPT-5 or GPT-6 capable model completely locally at a low power draw. And this is so hard to wrap my head around. That will be incredible. And that's the type of thing I think that scares some of the people who are building these large centralized compute stacks.
And Satya, you've talked a lot about the distribution both to the edge as well as having inference capability distributed around the world.
Yeah, I mean the way I've thought about it is more about really building a fungible fleet. In the cloud infrastructure business, one of the key things you have to do is have two things: one is an efficient token factory, and then high utilization. That's it. There are two simple things that you need to achieve. And in order to have high utilization, you have to have multiple workloads that can be scheduled even on the training. If you look at the AI pipelines, there's pre-training, mid-training, post-training, RL. You want to be able to do all of those things. So thinking about fungibility of the fleet is everything for a cloud provider.
Okay. So, Sam, you referenced, and Reuters was reporting yesterday that OpenAI may be planning to go public late '26 or in '27.
No, no, no. We don't have anything that specific. I'm a realist. I assume it will happen someday, but that was... I don't know why people write these reports. We don't have a date in mind or a decision to do this or anything like that. I just assume it's where things will eventually go.
But it does seem to me if you guys are doing in excess of $100 billion of revenue in '28 or '29, that you at least would be in position to... What? How about '27? Even better. You are in position to do an IPO at the rumored trillion dollars. Again, just to contextualize for listeners, if you guys went public at 10 times $100 billion in revenue, which would be a lower multiple than Facebook went public at, a lower multiple than a lot of other big consumer companies went public at, that would put you at a trillion dollars. If you floated 10 to 20% of the company, that raises $100 to $200 billion, which seems like a good path to fund a lot of the growth and the stuff that we just talked about. So you're not opposed to it?
But you guys are funding the company with revenue growth, which is what I would like us to do. No doubt about it. Well, I've also said that this is such an important company, and there are so many people, including my kids, who like to trade their little accounts and they use ChatGPT. And I think having retail investors have an opportunity to buy one of the most important and largest companies... that is probably the single most appealing thing about it to me. That would be really nice.
One of the things I've talked to you both about, shifting gears again, is part of the big beautiful bill. Senator Cruz had included federal preemption so that we wouldn't have this state patchwork of 50 different laws that mires the industry down in needless compliance and regulation. Unfortunately, it got killed at the last second by Senator Blackburn because frankly, I think AI is pretty poorly understood in Washington, and there's a lot of doomerism that has gained traction in Washington. So now we have state laws like the Colorado AI Act that goes into full effect in February, I believe, that creates this whole new class of litigants: anybody who claims any unfair impact from algorithmic discrimination in a chatbot. So somebody could claim harm for countless reasons. Sam, how worried are you that having this state patchwork of AI poses real challenges to our ability to continue to accelerate and compete around the world?
I don't know how we're supposed to comply with that Colorado law. I would love them to tell us. We'd like to be able to do it, but from what I've read of that, I literally don't know what we're supposed to do. I'm very worried about a 50-state patchwork. I think it's a big mistake. I think there's a reason we don't usually do that for these sorts of things. I think it'd be bad.
Yeah. I mean, I think the fundamental problem of this patchwork approach is, quite frankly, between OpenAI and Microsoft, we'll figure out a way to navigate this. We can figure this out. The problem is anyone starting a startup and trying to... it just goes to the exact opposite of what the intent here is. Obviously safety is very important, making sure that the fundamental concerns people have are addressed, but there's a way to do that at the federal level. So I think if the US leads, it's better as one regulatory framework for sure.
And to be clear, it's not that one is advocating for no regulation. It's simply saying let's have agreed upon regulation at the federal level as opposed to 50 competing state laws, which certainly firebombs the AI startup industry and makes it super challenging even for companies like yours who can afford to defend all these cases.
