Founding ambitions and the research era
OpenAI began as a nonprofit in December 2015 after a dinner in San Francisco. Eleven founders, including Sam Altman, Elon Musk, Ilya Sutskever, and Greg Brockman, pledged $1 billion to the project. The group included Trevor Blackwell, Vicki Cheung, Andrej Karpathy, Durk Kingma, John Schulman, Pamela Vagata, and Wojciech Zaremba. Pledges from Reid Hoffman, Jessica Livingston, Peter Thiel, Amazon Web Services, and Infosys totaled $1 billion, though only $133 million arrived by 2021. Musk resigned from the board in 2018 because of potential conflicts with Tesla. The company changed to a capped-profit structure in 2019 to attract capital. OpenAI LP was owned by the nonprofit, employees, and investors, while OpenAI Global, LLC was owned by OpenAI LP and Microsoft. OpenAI hired its first nine employees in December 2015 and spent $7 million on 52 employees in 2016. Nvidia gifted its first DGX-1 supercomputer to OpenAI in August 2016 to reduce processing time. OpenAI’s mission aimed to ensure artificial general intelligence benefits all of humanity. OpenAI released GPT-1 in 2018 using 7,000 unpublished books. The company released GPT-2 in 2019 but kept the model closed to prevent misuse. GPT-3 arrived in June 2020 and used 175 billion parameters. OpenAI launched GPT-4 in March 2023 to show human-level performance on professional benchmarks. ChatGPT then arrived in November 2022 to change the industry.
The ChatGPT investment wave
The launch of ChatGPT in late 2022 caused a massive increase in generative AI interest. ChatGPT is a conversational tool capable of answering follow-up questions and rejecting inappropriate requests. ChatGPT reached 1 million users in five days and 100 million users within two months. By February 2026, the tool reached 900 million weekly users. As of September 2026, ChatGPT is the fifth-most visited website globally. About 42% of ChatGPT users are under the age of 25 and 18% are American. OpenAI revenue reached $50 billion in annual recurring revenue in October 2026. The company expects revenue to reach $12.7 billion this year. In April 2025, SoftBank led a $40 billion funding round that valued OpenAI at $300 billion. This investment followed a $13 billion total investment from Microsoft. This scale of investment follows Nvidia’s planned $100 billion stake in OpenAI announced in September. In 2025, OpenAI launched Atlas and Sora to expand its reach. These tools arrived after half of its AI safety researchers left the company in 2024. I find the company’s massive revenue growth impressive. The company lost $540 million in 2022. The user base includes 35 million paying subscribers. ChatGPT introduced ads to its free version in early 2026.
The shifting cloud landscape
The partnership between Microsoft and OpenAI is no longer an exclusive arrangement. Microsoft holds 27% of OpenAI Group PBC. OpenAI can now use any cloud provider, including Amazon and Google. AWS is the exclusive third-party provider for the Frontier tool. The revised agreement between Microsoft and OpenAI provides Microsoft with an intellectual property license through 2032 while it simultaneously allows OpenAI to use third-party cloud providers like Amazon and Google for its various diverse AI model service needs. You probably already know Microsoft was the first major partner.
| Provision | Term Summary |
|---|---|
| IP Rights | Microsoft rights last through 2032 |
| Cloud | OpenAI can use third-party clouds |
| Azure Commitment | OpenAI must purchase $250B in services |
| Ownership | Microsoft holds 27% stake |
OpenAI completed its restructuring in October 2025. The entity operates as a public benefit corporation. The OpenAI Foundation holds a 26% stake. The nonprofit board maintains control. Microsoft holds an investment in OpenAI Group PBC valued at $135 billion. AWS expanded its relationship with OpenAI in February when it announced a $50 billion investment and a $100 billion contract. OpenAI is also working on the Stargate project, a $500 billion investment in US AI infrastructure. An independent expert panel will verify any declaration of AGI. Will Microsoft lose its dominance as OpenAI expands its cloud options?
