OpenAI Made a $12B Loss Last Quarter, Microsoft Results Indicate (www.wsj.com)

Microsoft’s latest earnings revealed a $4.1 billion charge tied to its OpenAI investment, a figure auditors and analysts say implies OpenAI itself lost more than $12 billion last quarter. Because Microsoft uses the equity method of accounting—reporting its proportional share of OpenAI’s results—the $4.1B hit corresponds to Microsoft’s previously disclosed 32.5% stake (analyst Firoz Valliji estimates an implied loss of roughly $12.6B). OpenAI recently restructured to a capped for‑profit model that will leave Microsoft with a 27.5% stake going forward, which should reduce Microsoft’s direct reported exposure to future OpenAI losses. For the AI/ML community this is a stark signal of the enormous costs of scaling frontier models: massive GPU/TPU compute bills, bespoke infrastructure, R&D and talent expenses, productization and data costs all add up. The headline number pressures OpenAI (and its partners) to accelerate monetization, tighten economics, or seek new capital — which could influence API pricing, Azure terms for large model workloads, and incentives around efficiency research and open‑source alternatives. It also highlights accounting and strategic implications for corporate partners: stake size, accounting method, and corporate restructurings can materially affect how AI investments show up on balance sheets and investor sentiment.