New Delhi: Microsoft recently labeled OpenAI as a competitor in both Artificial Intelligence (AI) and search, signaling a shift in their relationship. This change was highlighted in Microsoft’s latest 10-K SEC filing, where OpenAI was listed among competitors like Anthropic, Amazon, and Meta in the AI space. Additionally, OpenAI was mentioned as a rival in search due to its new SearchGPT feature.
Microsoft and OpenAI have had a complex partnership, with Microsoft investing about $13 billion in the company. As part of this partnership, Microsoft uses OpenAI’s models in its products and is OpenAI’s exclusive cloud provider. However, the relationship seems to be changing, possibly because of concerns about antitrust issues, as the FTC is currently investigating similar cloud investments in AI startups. Microsoft also recently gave up its board observer seat at OpenAI, a position it had after OpenAI’s board briefly removed CEO Sam Altman last fall, leading Microsoft CEO Satya Nadella to offer jobs to Altman and other top executives at Microsoft.
In Silicon Valley, it’s common for companies to be both partners and competitors at the same time. For example, in the early 2000s, Yahoo partnered with Google by using its search results, but Google eventually became the dominant player in internet search, overtaking Yahoo. This shows that Microsoft and OpenAI’s relationship could evolve similarly.
Despite its ties with OpenAI, Microsoft is not relying solely on that partnership. In March, Microsoft hired the co-founders of AI startup Inflection AI, Mustafa Suleyman and Karén Simonyan, to lead its new AI division. Microsoft is also heavily investing in its own AI initiatives, like Microsoft Copilot, to build an AI future that is separate from OpenAI.
