In its Q2 FY2026 earnings report, released on January 28, 2026, Microsoft revealed that 45% of its record-breaking $625 billion commercial remaining performance obligation (RPO) is tied specifically to OpenAI.
This disclosure provided rare visibility into the depth of the partnership, showing that roughly $281 billion of Microsoft’s future contracted revenue is committed to a single customer as OpenAI scales its usage of the Azure cloud infrastructure.
1. The $625 Billion Backlog Breakdown
Microsoft’s total commercial RPO—the value of future revenue under contract but not yet recognized—rose 110% year-over-year to $625 billion.
| Component | Value (Estimated) | Year-on-Year Growth |
| OpenAI Portion | ~$281.3 Billion | Highly Accelerated (New Contract) |
| Non-OpenAI Portion | ~$343.7 Billion | ↑ 28% |
| Total Backlog | $625.0 Billion | ↑ 110% |
The massive leap was primarily triggered by a new multi-year contract signed in October 2025, which added roughly $250 billion to OpenAI’s long-term commitments for Azure capacity.
2. Strategic “Circular” Concerns
The disclosure sparked intense debate among Wall Street analysts regarding the “durability” of this growth:
- Concentration Risk: Jefferies analyst Brent Thill and others questioned the “durability” of the backlog, noting that 45% of Microsoft’s future visibility is dependent on a single startup’s ability to stay solvent and reach its own massive financial targets.
- The Circular Economy: Critics argue that because Microsoft is a major investor in OpenAI, the massive cloud bill is effectively “roundtripping” capital, though Microsoft CFO Amy Hood pushed back, emphasizing that the remaining 55% of the backlog ($344B) is more diversified than most of its peers.
- Anthropic’s Role: The non-OpenAI portion of the backlog also received a boost from Anthropic, which signed a $30 billion compute pact with Microsoft late last year.
3. Accounting for the “OpenAI Windfall”
The concentration in the backlog was accompanied by a massive one-time accounting gain on Microsoft’s balance sheet:
- $7.6 Billion Gain: Microsoft recorded a post-tax gain of $7.6 billion this quarter due to OpenAI’s October 2025 recapitalization.
- GAAP Distortion: This gain boosted Microsoft’s GAAP net income to $38.5 billion (a 60% jump), though adjusted (non-GAAP) earnings, which strip out this one-time impact, were $4.14 per share.
4. Azure Capacity Constraints
The immense backlog highlights a physical reality: Microsoft is selling capacity as fast as it can build it.
- Capex Surge: To support the $625 billion backlog, Microsoft spent $37.5 billion on capital expenditures this quarter alone—a 66% increase.
- Tokens per Watt: CEO Satya Nadella noted that the company is optimizing for “tokens per watt per dollar,” achieving a 50% increase in throughput for OpenAI workloads this quarter through infrastructure advances.
Conclusion: The “OpenAI Proxy”
Microsoft has essentially become a high-margin proxy for OpenAI’s growth. While the 45% backlog concentration creates a single point of failure, it also guarantees Microsoft a dominant share of the AI compute market for the next seven years. For investors, the question is no longer if AI demand exists, but how fast Microsoft can build the data centers to fulfill the $281 billion in orders OpenAI has already signed for.
