Microsoft Now Lists OpenAI as a Competitor in AI and Search

Microsoft has a long and complicated history with OpenAI, reportedly investing $13 billion in developer ChatGPT as part of a long-term partnership. Under the deal, Microsoft runs OpenAI models in its enterprise and consumer products and is the exclusive provider of OpenAI’s cloud.

However, on Tuesday, the tech giant called the startup a “competitor” for the first time in its SEC filing.

In Microsoft’s annual 10K, OpenAI joins a long list of AI competitors alongside Anthropic, Amazon, and Meta. OpenAI was also listed alongside Google as a Microsoft competitor in search, thanks to OpenAI’s new SearchGPT feature announced last week.

Microsoft may be trying to change the narrative about its relationship with OpenAI in light of antitrust concerns — the FTC is currently investigating that relationship, as well as similar investments by cloud providers in AI startups. Microsoft recently agreed to give up its board observer seat at the startup — a seat it acquired after a turmoil last fall in which OpenAI’s board briefly fired CEO Sam Altman, prompting Microsoft CEO Satya Nadella to offer him and other top executives positions at Microsoft.

However, SEC filings like these are often where corporations send overly cautious warnings to investors.

Partners and competitors are certainly not mutually exclusive titles in Silicon Valley. In 2000, then-dominant search engine Yahoo announced a deal to have Google search results appear on its website. The two companies were partners for a few years, until Google took Yahoo’s lunch in search and became the unofficial but dominant gateway to the Internet. The two companies were partners, but they still posed a threat to each other. (Yahoo owns TechCrunch.)

The history of this type of change in technology is long enough that it is reasonable to assume that the collaboration between Microsoft and OpenAI will unfold in a similar manner.

However, Microsoft is not putting all its eggs in one basket.

In March, Microsoft hired the co-founders of the billion-dollar AI startup, Mustafa Suleyman and Karén Simonyan of Inflection AI, to lead a new Microsoft AI division. The cloud provider is investing heavily in Microsoft Copilot and building an AI future that is entirely separate from OpenAI.