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took a $3.1 billion hit to its net income in the first quarter due to the software company’s hefty investment in OpenAI.
In its earnings report on Wednesday, Microsoft said the drop in profit reflected an “equity method investment,” resulting in a 41-cent decline in earnings per share. Net income still rose to $27.7 billion, or $3.72 per share, from $24.67 billion, or $3.30 per share, a year ago.
Since first backing OpenAI in 2019, Microsoft has committed to invest $13 billion in the company, with $11.6 billion already funded as of the end of September, according to a filing.
The announcement comes a day after OpenAI announced that it completed a recapitalization, cementing its structure as a nonprofit with a controlling stake in its for-profit business. The nonprofit, now called the OpenAI Foundation, holds an equity stake worth about $130 billion in its for-profit arm.
