Microsoft reports a staggering loss of $3.1 billion from its OpenAI investment in Q1 FY2026, a 492.7% increase from $523 million the previous year. This decline in net income reduced the diluted earnings per share (EPS) by $0.41. Microsoft's total commitment to OpenAI, now valued at $135 billion for a 27% stake, supports OpenAI's transition to a Public Benefit Corporation, while establishing Microsoft as OpenAI's sole cloud provider until the declaration of Artificial General Intelligence.