In a surprising twist, Microsoft has named OpenAI one of its significant artificial intelligence and search competitors. This recognition comes even though Microsoft has invested over $13 billion in OpenAI and has been a crucial partner in developing advanced AI technologies.
Microsoft's fiscal 2024 report, filed this week, includes OpenAI in its list of rivals for the first time. The list also mentions other tech giants, such as Amazon and Google, reflecting the growing overlap in their businesses. The relationship between Microsoft and OpenAI has been pivotal for both companies. Microsoft has supported OpenAI financially, enabling it to make costly investments needed to create sophisticated AI systems. OpenAI has provided Microsoft with the technology necessary to advance the AI race.
Despite this collaboration, the two companies are increasingly finding themselves in direct competition in promising technology areas. Microsoft and OpenAI are focused on the growing adoption of AI by large corporations, applying it in areas such as customer service and software development. A key area of competition is Internet search. OpenAI recently launched SearchGPT, a competitor to Microsoft's Bing search engine, which uses OpenAI technology. This move underscores how both companies are trying to gain an edge in the search market.
The complexity of their relationship has intensified with increasing regulatory attention. Microsoft joined OpenAI's board as an observer after the brief dismissal of Sam Altman but resigned from that position last month due to regulatory concerns about the dominance of big tech in AI.
In its annual report filed with the U.S. Securities and Exchange Commission, Microsoft classified OpenAI as a competitor in AI products. This group includes Microsoft's biggest rivals in cloud computing - Amazon and Google, as well as Meta Platforms and Anthropic, an Amazon-backed startup. Microsoft said these competitors are part of a broader group, "many of whom are also current or potential partners". In addition, Microsoft listed OpenAI as a competitor in search and news advertising, along with Google and social networking portals.
The inclusion of OpenAI in Microsoft's list of competitors marks a significant change in their relationship dynamics. Although they remain partners, competition between them is set to intensify in the coming years, especially in artificial intelligence and search.
