The relationship between Microsoft and the AI startup OpenAI may be getting complicated, as Microsoft has included OpenAI on its list of competitors in its annual report, alongside companies like Amazon, Apple, Google, and Meta Platforms, according to a CNBC report,
Microsoft and OpenAI have established a long-term partnership, with Microsoft serving as OpenAI's exclusive cloud service provider and using OpenAI's AI models in Azure enterprise and consumer products.
Microsoft is also OpenAI's largest investor, having invested over US$13 billion.
Partners turned competitors?
However, in its latest annual report, Microsoft identified OpenAI as a competitor in areas such as AI products, search, and news advertising.
The report notes that some customers now choose to pay OpenAI directly to access its AI models, while others use Microsoft's Azure OpenAI Service. For customers seeking alternatives to ChatGPT, Microsoft's Copilot chatbot offers another option.
Moreover, OpenAI recently launched a prototype search engine called SearchGPT, which could potentially compete with Microsoft's Bing search engine.
Microsoft has not provided additional comments on this development. Nonetheless, Microsoft CEO Satya Nadella previously emphasized that his relationship with OpenAI CEO Sam Altman remains strong, with the two having communicated nearly every day.
An OpenAI spokesperson told CNBC that the relationship between the two companies remains unchanged and that their collaboration was established with the understanding that they would eventually become competitors.
This is not the first instance of tension between the two companies. In November 2024, the relationship became strained when OpenAI's board temporarily removed CEO Sam Altman without reportedly informing Microsoft CEO Satya Nadella.
After Altman was swiftly reinstated, Microsoft was granted a non-voting board seat at OpenAI. However, they vacated the position in July 2024 due to concerns over antitrust issues.
