You would be shocked to know this, but Microsoft’s $1 billion investment in OpenAI nearly didn’t happen. During a media conference, Microsoft CEO Satya Nadella recently revealed that company cofounder Bill Gates warned him the bet might be a flop. “Yeah, you’re going to burn this billion dollars,” Gates reportedly told Nadella in 2019.
However, Nadella and the Microsoft team did not give up. The first investment was considered a means to enter the AI space and enhance Azure’s capabilities, even though OpenAI was a nonprofit organisation at the time.
Nadella said that although board approval was necessary due to the amount of investment, he found it “not that hard to convince anyone that this is an important area.”
Microsoft turned that risk into transformative and ended up investing $13 billion in OpenAI. By October 2025, OpenAI restructured, granting Microsoft a 27% stake worth about $135 billion. The new agreement states that OpenAI will purchase $250 billion of Azure services over time and pay 20% of its revenues to Microsoft until 2032.
In January 2026, OpenAI’s net income reportedly reached $7.6 billion, highlighting the immense value of Nadella’s early gamble.
Even Gates has acknowledged the impact of AI, stating that it could eventually make humans unnecessary for most tasks. “There will be some things we reserve for ourselves,” he said, “but in terms of making things and moving things and growing food, over time those will be basically solved problems.”
This early investment also contributed to Microsoft’s position at the forefront of the AI revolution, incorporating OpenAI models into its offerings like Microsoft 365 Copilot, Azure AI services, and other business solutions.