For years, Microsoft’s list of competitors has included familiar names like Amazon, Apple, Google, and Meta.
The lines are blurring between collaboration and competition in the world of AI. Microsoft, in its latest annual report, has officially designated OpenAI, the artificial intelligence startup it has heavily invested in, as a competitor. This unexpected move highlights the increasingly complex relationship between the two tech giants.
For years, Microsoft’s list of competitors has included familiar names like Amazon, Apple, Google, and Meta. But the addition of OpenAI signals a shift, acknowledging that despite their close partnership, the two companies are increasingly encroaching on each other’s territory.
Microsoft has invested a reported $13 billion in OpenAI and serves as its exclusive cloud provider. OpenAI’s powerful AI models are integrated into various Microsoft products for both commercial and consumer use.
However, both companies are now offering competing products and services in the AI space. While some companies opt to work directly with OpenAI, others access its models through Microsoft’s Azure OpenAI Service. Microsoft has also developed its own AI chatbot, Copilot, which is integrated into Bing search and Windows operating systems.
An OpenAI spokesperson downplayed the significance of the listing, stating that the competitive aspect was always understood within the partnership. An OpenAI spokesperson told CNBC that nothing about the relationship between the two companies has changed and that their partnership was established with the understanding that they would compete. “Microsoft remains a good partner to OpenAI,” the spokesperson said.
A Tumultuous Relationship
Despite the reassurances, the Microsoft-OpenAI partnership has faced its share of turbulence this year. The abrupt ousting and subsequent reinstatement of OpenAI CEO Sam Altman in November reportedly caught Microsoft CEO Satya Nadella off guard. Microsoft recently relinquished its non-voting board seat at OpenAI.
Furthermore, Nadella’s recent appointment of Mustafa Suleyman, a co-founder of Google’s DeepMind AI research lab, to lead Microsoft’s new AI unit has fuelled speculation about internal competition and the company’s long-term AI strategy.