{"id":120461,"date":"2024-10-31T13:44:55","date_gmt":"2024-10-31T06:44:55","guid":{"rendered":"https:\/\/hotvideos24.online\/?p=120461"},"modified":"2024-10-31T13:44:55","modified_gmt":"2024-10-31T06:44:55","slug":"microsoft-cfo-says-openai-investment-will-cut-into-profit-this-quarter","status":"publish","type":"post","link":"https:\/\/hotvideos24.online\/?p=120461","title":{"rendered":"Microsoft CFO says OpenAI investment will cut into profit this quarter"},"content":{"rendered":"<p> <script async src=\"https:\/\/pagead2.googlesyndication.com\/pagead\/js\/adsbygoogle.js?client=ca-pub-3711241968723425\"\r\n     crossorigin=\"anonymous\"><\/script>\r\n<ins class=\"adsbygoogle\"\r\n     style=\"display:block\"\r\n     data-ad-format=\"fluid\"\r\n     data-ad-layout-key=\"-fb+5w+4e-db+86\"\r\n     data-ad-client=\"ca-pub-3711241968723425\"\r\n     data-ad-slot=\"7910942971\"><\/ins>\r\n<script>\r\n     (adsbygoogle = window.adsbygoogle || []).push({});\r\n<\/script><br \/>\n<\/p>\n<div id=\"RegularArticle-ArticleBody-5\" data-module=\"ArticleBody\" data-test=\"articleBody-2\" data-analytics=\"RegularArticle-articleBody-5-2\"><span class=\"HighlightShare-hidden\" style=\"top:0;left:0\"\/><\/p>\n<div class=\"InlineImage-imageEmbed\" id=\"ArticleBody-InlineImage-107329682\" data-test=\"InlineImage\">\n<div class=\"InlineImage-wrapper\">\n<div>\n<p>Microsoft CEO Satya Nadella, right, speaks as OpenAI CEO Sam Altman looks on during the OpenAI DevDay event in San Francisco on Nov. 6, 2023.<\/p>\n<p>Justin Sullivan | Getty Images<\/p>\n<\/div>\n<\/div>\n<\/div>\n<div class=\"group\">\n<p><span class=\"QuoteInBody-quoteNameContainer\" data-test=\"QuoteInBody\" id=\"RegularArticle-QuoteInBody-1\"><a href=\"https:\/\/www.cnbc.com\/quotes\/MSFT\/\">Microsoft<\/a><span class=\"QuoteInBody-inlineButton\"><span class=\"AddToWatchlistButton-watchlistContainer\" id=\"-WatchlistDropdown\" data-analytics-id=\"-WatchlistDropdown\"><button class=\"AddToWatchlistButton-watchlistButton\" aria-label=\"Add To Watchlist\" data-testid=\"dropdown-btn\"><span class=\"AddToWatchlistButton-addWatchListFromTag\"\/><\/button><\/span><\/span><\/span>&#8216;s massive investment in OpenAI is weighing on earnings.<\/p>\n<p>Following Microsoft&#8217;s <a href=\"https:\/\/www.cnbc.com\/2024\/10\/30\/microsoft-msft-q1-earnings-report-2025.html\">quarterly earnings report<\/a> on Wednesday, CFO Amy Hood said she expects the company to take a $1.5 billion hit to income in the current period, mainly because of an expected loss from OpenAI.<\/p>\n<p>Microsoft has invested close to $14 billion in OpenAI, whose ChatGPT assistant has gone viral and inspired a whole new industry called generative artificial intelligence. The trend has generated billions of dollars in new revenue for Microsoft.<\/p>\n<p>But OpenAI is losing bundles of cash. The company expects $5 billion in losses this year, before stock-based compensation, on $4 billion in revenue, <a href=\"https:\/\/www.theinformation.com\/articles\/openai-projections-imply-losses-tripling-to-14-billion-in-2026\" target=\"_blank\" rel=\"noopener\">The Information<\/a> reported earlier this month, citing documents.<\/p>\n<p>Hood said that for Microsoft, the loss is accounted for under the equity method. The accounting approach refers to a company&#8217;s share of the invested company&#8217;s profit or loss in a given period, a Microsoft spokesperson said.<\/p>\n<p>The additional detail is &#8220;not due to a change in our partnership or investment in OpenAI,&#8221; the spokesperson said in an email. &#8220;Our partnership with OpenAI continues to deliver results, as we build differentiated IP and drive revenue momentum.&#8221;<\/p>\n<p>The earnings call came after Microsoft reported an earnings and revenue beat for the fiscal first quarter. However, the stock slid in extended trading after the company&#8217;s forecast called for slower-than-expected growth.<\/p>\n<p>While OpenAI is a central part of Microsoft&#8217;s growth strategy, the company has been hedging its bets after integrating OpenAI&#8217;s models into several products and acting as the startup&#8217;s exclusive cloud infrastructure provider. On Tuesday, Microsoft&#8217;s GitHub subsidiary said it would allow developers to power the <a href=\"https:\/\/www.cnbc.com\/2024\/10\/29\/microsoft-github-copilot-goes-past-openai-opens-to-anthropic-google.html\">Copilot Chat feature<\/a> with models from <span class=\"QuoteInBody-quoteNameContainer\" data-test=\"QuoteInBody\" id=\"RegularArticle-QuoteInBody-5\"><a href=\"https:\/\/www.cnbc.com\/quotes\/GOOGL\/\">Google<\/a><span class=\"QuoteInBody-inlineButton\"><span class=\"AddToWatchlistButton-watchlistContainer\" id=\"-WatchlistDropdown\" data-analytics-id=\"-WatchlistDropdown\"><button class=\"AddToWatchlistButton-watchlistButton\" aria-label=\"Add To Watchlist\" data-testid=\"dropdown-btn\"><span class=\"AddToWatchlistButton-addWatchListFromTag\"\/><\/button><\/span><\/span><\/span> or startup Anthropic instead of OpenAI&#8217;s GPT-4o.<\/p>\n<p>In addition to the $13 billion Microsoft had invested in OpenAI as of Sept. 30, the company put in another $750 million in a funding round <a href=\"https:\/\/www.cnbc.com\/2024\/10\/02\/openai-raises-at-157-billion-valuation-microsoft-nvidia-join-round.html\">announced in October<\/a>, which valued OpenAI at $157 billion.<\/p>\n<p>Microsoft rivals are playing a similar game. <span class=\"QuoteInBody-quoteNameContainer\" data-test=\"QuoteInBody\" id=\"RegularArticle-QuoteInBody-7\"><a href=\"https:\/\/www.cnbc.com\/quotes\/AMZN\/\">Amazon<\/a><span class=\"QuoteInBody-inlineButton\"><span class=\"AddToWatchlistButton-watchlistContainer\" id=\"-WatchlistDropdown\" data-analytics-id=\"-WatchlistDropdown\"><button class=\"AddToWatchlistButton-watchlistButton\" aria-label=\"Add To Watchlist\" data-testid=\"dropdown-btn\"><span class=\"AddToWatchlistButton-addWatchListFromTag\"\/><\/button><\/span><\/span><\/span>, most notably, has invested <a href=\"https:\/\/www.cnbc.com\/2024\/03\/27\/amazon-spends-2point7b-on-startup-anthropic-in-largest-venture-investment.html\">$4 billion<\/a> in AI model company Anthropic, whose founders previously worked at OpenAI. Amazon reports earnings on Thursday.<\/p>\n<p>The OpenAI investment disclosure was new for Microsoft, but the company has registered over $2.3 billion in other expense in the past four quarters. That number has factored in the investment in OpenAI, the spokesperson said.<\/p>\n<p>On the earnings call, Microsoft CEO <a href=\"https:\/\/www.cnbc.com\/satya-nadella\/\">Satya Nadella<\/a> said the collaboration with OpenAI has benefited both parties and that the company feels good about &#8220;our investment stake in OpenAI.&#8221;<\/p>\n<p>OpenAI didn&#8217;t immediately respond to a request for comment.<\/p>\n<p><strong>WATCH:<\/strong> <a href=\"https:\/\/www.cnbc.com\/video\/2024\/10\/08\/oppenheimer-downgrades-microsoft-openai-losses-are-not-properly-priced-in.html\">Oppenheimer downgrades Microsoft: OpenAI losses are not properly priced in<\/a><\/p>\n<\/div>\n<div role=\"region\" aria-labelledby=\"Placeholder-ArticleBody-Video-108044824\">\n<div role=\"button\" tabindex=\"0\" id=\"Placeholder-ArticleBody-Video-108044824\" class=\"PlaceHolder-wrapper\" data-vilynx-id=\"7000354091\" data-test=\"VideoPlaceHolder\">\n<div class=\"InlineVideo-videoEmbed\" id=\"InlineVideo-0\" data-test=\"InlineVideo\">\n<div class=\"InlineVideo-wrapper\">\n<div class=\"InlineVideo-inlineThumbnailContainer\"><img decoding=\"async\" class=\"InlineVideo-videoThumbnail\" src=\"https:\/\/image.cnbcfm.com\/api\/v1\/image\/108044825-17284033241728403321-36580350911-1080pnbcnews.jpg?v=1728403323&amp;w=750&amp;h=422&amp;vtcrop=y\" alt=\"Oppenheimer downgrades Microsoft: OpenAI losses are not properly priced in\"\/><span class=\"InlineVideo-videoButton\"\/><span\/><\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<p><script async src=\"https:\/\/pagead2.googlesyndication.com\/pagead\/js\/adsbygoogle.js?client=ca-pub-3711241968723425\"\r\n     crossorigin=\"anonymous\"><\/script>\r\n<ins class=\"adsbygoogle\"\r\n     style=\"display:block\"\r\n     data-ad-format=\"fluid\"\r\n     data-ad-layout-key=\"-fb+5w+4e-db+86\"\r\n     data-ad-client=\"ca-pub-3711241968723425\"\r\n     data-ad-slot=\"7910942971\"><\/ins>\r\n<script>\r\n     (adsbygoogle = window.adsbygoogle || []).push({});\r\n<\/script><br \/>\n<br \/><div data-type=\"_mgwidget\" data-widget-id=\"1660802\">\r\n<\/div>\r\n<script>(function(w,q){w[q]=w[q]||[];w[q].push([\"_mgc.load\"])})(window,\"_mgq\");\r\n<\/script>\r\n<br \/>\n<br \/><a href=\"https:\/\/www.cnbc.com\/2024\/10\/30\/microsoft-cfo-says-openai-investment-will-cut-into-profit-this-quarter.html\">Source link <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Microsoft CEO Satya Nadella, right, speaks as OpenAI CEO Sam Altman looks on during the OpenAI DevDay event in San Francisco on Nov. 6, 2023. Justin Sullivan | Getty Images &hellip; <a href=\"https:\/\/hotvideos24.online\/?p=120461\" class=\"more-link\">Read More<\/a><\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[],"class_list":["post-120461","post","type-post","status-publish","format-standard","hentry","category-business","entry"],"_links":{"self":[{"href":"https:\/\/hotvideos24.online\/index.php?rest_route=\/wp\/v2\/posts\/120461","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/hotvideos24.online\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/hotvideos24.online\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/hotvideos24.online\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/hotvideos24.online\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=120461"}],"version-history":[{"count":0,"href":"https:\/\/hotvideos24.online\/index.php?rest_route=\/wp\/v2\/posts\/120461\/revisions"}],"wp:attachment":[{"href":"https:\/\/hotvideos24.online\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=120461"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/hotvideos24.online\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=120461"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/hotvideos24.online\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=120461"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}