Microsoft vs OpenAI: Revenue, Profit and Business Model
Microsoft reported $331.8B of revenue in FY2026 and $133.7B of net income. OpenAI reported $20B of revenue in FY2025 and — of net income.
Latest financial snapshot
Financial summary
Microsoft
Microsoft's FY2026 revenue rose 17.8% to $331.8 billion, operating income rose 21% to $155.2 billion, and GAAP net income rose 31% to $133.7 billion. Fourth-quarter revenue was $90.0 billion (up 18%) with net income of $35.8 billion, helped by a $3.2 billion gain on its Anthropic investment. Microsoft Cloud revenue reached $59.3 billion in Q4, up 27%. The main pressure point is capital intensity: AI data center spending has pushed free cash flow growth well below earnings growth.
OpenAI
OpenAI reports revenue as annualized run rate rather than audited GAAP figures. The company says it reached $1 billion of revenue within a year of launching ChatGPT, was generating about $1 billion per quarter by the end of 2024, and passed $20 billion of annualized revenue by the end of 2025. Axios reported the run rate was nearing $70 billion at the end of September 2026. Funding has scaled alongside: $110 billion announced in February 2026 at a $730 billion pre-money valuation grew to $122 billion committed at $852 billion post-money by March 31, 2026, anchored by Amazon, Nvidia and SoftBank. An employee tender of about $7 billion followed in August 2026 at the same valuation. The company remains unprofitable because compute spending outpaces revenue.
Revenue and profit by year
Microsoft
| Year | Revenue | Net income | Margin | Growth | Source |
|---|---|---|---|---|---|
| FY2026 | $331.8B | $133.7B | 40.3% | +17.8% | Source |
| FY2025 | $281.7B | $101.8B | 36.1% | +14.9% | Source |
| FY2024 | $245.1B | $88.1B | 36.0% | +15.7% | Source |
| FY2023 | $211.9B | $72.4B | 34.1% | +6.9% | Source |
| FY2022 | $198.3B | $72.7B | 36.7% | +18.0% | Source |
| FY2021 | $168.1B | $61.3B | 36.5% | +17.5% | Source |
| FY2020 | $143B | $44.3B | 31.0% | +13.6% | Source |
| FY2019 | $125.8B | $39.2B | 31.2% | +14.0% | Source |
| FY2018 | $110.4B | $16.6B | 15.0% | +14.3% | Source |
| FY2017 | $96.6B | $25.5B | 26.4% | — | Source |
OpenAI
| Year | Revenue | Net income | Margin | Growth | Source |
|---|---|---|---|---|---|
| FY2025 | $20B | — | 0.0% | +400.0% | Source |
| FY2024 | $4B | — | 0.0% | +100.0% | Source |
| FY2023 | $2B | — | 0.0% | — | Source |
Where the revenue comes from
Microsoft
- Productivity And Business ProcessesMajor
Office, Microsoft 365, LinkedIn, Dynamics, and related cloud services.
- Intelligent CloudMajor
Azure, server products, enterprise services, and cloud infrastructure.
- More Personal ComputingMajor
Windows, devices, gaming, search, and advertising.
- AI Services And CopilotsGrowth
AI features and model-powered services embedded across Azure, Microsoft 365, GitHub, security, and developer tools.
OpenAI
- ChatGPT SubscriptionsMajor
Consumer, team, business, education, and enterprise subscriptions.
- API UsageMajor
Usage-based developer and enterprise model access through OpenAI APIs.
- Enterprise PlatformGrowing
Business deployments, governance, custom workflows, and platform services.
- Partnerships and LicensingEmerging
Strategic licensing, infrastructure partnerships, commerce, and outcome-based AI workflows.
Business model and strategy
Microsoft
How it makes money
Microsoft reports three segments. Intelligent Cloud covers Azure, SQL Server, Windows Server, GitHub, Nuance, and enterprise services; server products and cloud services alone brought in $129.4 billion in FY2026, and Azure passed $100 billion in annual revenue for the first time.
Growth strategy
Microsoft's growth plan centers on AI capacity and AI subscriptions. It is spending heavily on data centers and chips to meet Azure demand that management says remains capacity constrained, and it is selling Microsoft 365 Copilot as a paid add-on, which passed 30 million paid seats by the end of FY2026.
Competitive advantage
Microsoft's main advantage is distribution inside enterprises. Identity (Entra), email and documents (Microsoft 365), collaboration (Teams), developer tools (GitHub, Visual Studio), and cloud infrastructure (Azure) are often bought together, which raises switching costs and lets Microsoft attach new products such as Copilot to existing contracts.
OpenAI
How it makes money
OpenAI earns revenue in three main ways. First, ChatGPT subscriptions: consumer tiers such as Plus and Pro, plus Business, Enterprise and Edu seats sold to organizations. Second, the API platform, where developers and companies pay per token to build OpenAI models (GPT, reasoning, image, audio and embeddings) into their own software.
Growth strategy
OpenAI is growing on four fronts: selling ChatGPT and Codex into enterprises, turning ChatGPT into a broader 'super app' with agents, shopping and apps inside the chat, building its own compute through the Stargate data center program and chip partnerships, and moving into hardware through the 2025 acquisition of Jony Ive's io.
Competitive advantage
OpenAI's advantage is distribution plus scale. ChatGPT is the most widely used AI assistant, with OpenAI citing more than 900 million weekly users in February 2026, which gives it a direct consumer channel that rivals have to buy or build.
Questions about Microsoft vs OpenAI
Which company has higher revenue — Microsoft Corporation or OpenAI?
Microsoft Corporation reported $331.8B (FY2026), while OpenAI reported $20.0B (FY2025). By last reported revenue, Microsoft Corporation is the larger business, with OpenAI reporting a smaller revenue base. Note: these are from different fiscal years and are not a direct like-for-like comparison.
What is the market cap of Microsoft Corporation vs OpenAI?
Microsoft Corporation has a market capitalisation of $3.83T. A public market cap figure for OpenAI was not available (it may be privately held).
Which is more financially efficient — Microsoft Corporation or OpenAI?
Microsoft Corporation generates $1.49M / employee in revenue per employee, while OpenAI generates $4.44M / employee. OpenAI shows higher revenue efficiency per headcount, though this reflects business model differences — capital-light software companies routinely outperform labour-intensive manufacturers on this metric.
How do Microsoft Corporation and OpenAI make money?
Microsoft Corporation and OpenAI generate revenue in fundamentally different ways. Microsoft Corporation: Microsoft reports three segments. OpenAI: OpenAI earns revenue in three main ways.
Is Microsoft Corporation bigger than OpenAI?
By last reported revenue, Microsoft Corporation ($331.8B (FY2026)) is the larger company compared to OpenAI ($20.0B (FY2025)). Revenue scale is one dimension of size — market capitalisation, employee count, and geographic reach are also relevant depending on the context.
Figures come from each company's filings and the sources linked beside them. Amounts reported in another currency are shown in US dollars at an approximate rate and marked with ~. Back to the Microsoft vs OpenAI overview