OpenAI warned investors that its heavy dependence on Microsoft Corp. (MSFT  ) for "a substantial portion of our financing and compute" could pose a business risk, according to a document tied to its latest funding round.

Microsoft Reliance Raises Risk Concerns

The company, which recently secured $110 billion in funding and is seeking an additional $10 billion, said its future performance depends on diversifying partners beyond Microsoft, CNBC reported on Monday.

OpenAI also highlighted rising compute costs, potential chip supply disruptions, and ongoing litigation as key risks, offering a preview of disclosures ahead of a possible IPO.

Strong Revenue Growth Continues

OpenAI's rapid growth underscores both its scale and rising costs. The company has surpassed $25 billion in annualized revenue as of last month, up from $21.4 billion a year earlier, according to a recent report.

Revenue has surged sharply in recent years, but the company continues to face heavy compute spending, now projected at about $600 billion through 2030.

Competition Intensifies In AI Race

Despite its impressive growth, OpenAI faces stiff competition. Anthropic, also poised for IPO, is targeting a nearly 180% revenue increase in a single year, putting pressure on the Sam Altman-led firm.

Funding Boom Driven By Mega Deals

In February, global startup funding hit $189 billion on the back of OpenAI, which led the round with $110 billion, Anthropic at $30 billion, and Alphabet Inc.'s (GOOG  ) (GOOGL  ) Waymo at $16 billion, which together accounted for 83% of total venture capital that month, Crunchbase reported.

Besides SoftBank Group Corp. (SFTBY  ), OpenAI received funding from Amazon.com Inc. (AMZN  ) and Nvidia Corp. (NVDA  ). Nvidia CEO Jensen Huang stated that its $30 billion investment may be the last before OpenAI's IPO later this year.