Microsoft declares OpenAI as a competitor in AI, search
What's the story
In a significant shift, Microsoft has recognized artificial intelligence (AI) firm OpenAI as a competitor. This development was revealed in the tech giant's latest annual report. The two companies have had a long-standing partnership, with Microsoft being the exclusive cloud provider for OpenAI and integrating its AI models into various products for both commercial and consumer use.
Financial ties
Microsoft's significant investment in OpenAI
Despite being the largest investor in OpenAI with a reported investment of $13 billion, Microsoft now perceives the Sam Altman-led AI startup as a competitor. Traditionally, Microsoft's list of competitors has included tech giants such as Amazon, Apple, Google, and Meta. The inclusion of OpenAI signifies an overlap in their respective domains.
Competitive landscape
OpenAI's impact on AI and search domains
OpenAI, known for developing the ChatGPT chatbot, was identified by Microsoft as a competitor in AI offerings and in search and news advertising. This recognition follows OpenAI's recent announcement of a prototype for a search engine named SearchGPT. In response to ChatGPT, Microsoft provides its Copilot chatbot via the Bing search engine and Windows operating systems.
Unchanged relationship
OpenAI maintains partnership with Microsoft
Despite the newly competitive stance, an OpenAI representative has stated that the relationship between the two companies remains unchanged. The representative clarified that their collaboration was formed with the understanding that they would compete, and affirmed that Microsoft continues to be a good partner to OpenAI. This statement comes amid recent tensions following changes in OpenAI's leadership, which were not initially communicated to Microsoft CEO Satya Nadella.
Strategic moves
Nadella's new AI unit and relationship with Altman
In March, Nadella appointed Mustafa Suleyman, co-founder of DeepMind—an AI research company acquired by Google in 2014—as CEO of a new division named Microsoft AI. Several employees from Suleyman's startup, Inflection AI, joined him at Microsoft. Despite recent developments and leadership changes at OpenAI, Nadella maintains a close relationship with Sam Altman. In a recent interview with NYT, Nadella said, "One of the things I love about Sam is every day he's calling me and saying 'I need more.'"