Microsoft Lists OpenAI as Competitor in AI and Search

Microsoft has a complex relationship with OpenAI, having invested $13 billion in the ChatGPT creator as part of a long-term partnership. Microsoft runs OpenAI’s models across its products and serves as OpenAI’s exclusive cloud provider. However, in a surprising move, Microsoft has officially labeled OpenAI a “competitor” in a recent SEC filing.

A New Competitor in AI and Search

In Microsoft’s annual 10-K report, OpenAI was listed among competitors in AI, alongside Anthropic, Amazon, and Meta. Additionally, OpenAI was cited as a competitor in search, thanks to its new SearchGPT feature announced last week. This marks the first time Microsoft has publicly recognized OpenAI as a direct competitor.

Changing the Narrative Amid Antitrust Concerns

The shift in narrative may be related to ongoing antitrust investigations. The FTC is scrutinizing Microsoft’s relationship with OpenAI and similar cloud provider investments in AI startups. Recently, Microsoft relinquished its board observer seat at OpenAI, a position it acquired following a brief dispute last fall when OpenAI’s board temporarily fired CEO Sam Altman. During the incident, Microsoft CEO Satya Nadella offered jobs to Altman and other top executives.

Silicon Valley's Dual Roles: Partners and Competitors

In Silicon Valley, it is not uncommon for companies to be both partners and competitors. Historical examples include Yahoo and Google, who partnered in the early 2000s before Google overtook Yahoo in search dominance. Similarly, Microsoft and OpenAI’s relationship could evolve in unpredictable ways.

Microsoft’s Broader AI Strategy

Microsoft is diversifying its AI investments. In March, the company hired the cofounders of AI startup Inflection AI, Mustafa Suleyman and Karén Simonyan, to lead its new AI division. Microsoft is also heavily investing in Microsoft Copilot, aiming to build an AI future independent of OpenAI.