Microsoft lists longtime partner OpenAI as competitor in annual report

In Microsoft’s latest annual report, the tech giant has labelled OpenAI as a competitor. This small inclusion could hint at a notable shift in their relationship. The announcement has stirred quite an interest, given Microsoft’s significant investment in OpenAI and its collaborative history with the AI company.

As OpenAI’s exclusive cloud provider, Microsoft integrated OpenAI’s AI models into its products for both commercial clients and consumers. Notably, Microsoft has invested around $13 billion in OpenAI.

However, Microsoft’s latest annual report highlights a competitive edge, where it lists OpenAI alongside tech giants like Amazon, Google, and Meta. This change signals a potential shift as both companies explore overlapping territories.

OpenAI has been a critical partner, especially with the development and deployment of ChatGPT. Recently, OpenAI announced a prototype search engine called SearchGPT, which directly challenges Microsoft’s own AI initiatives.

The company stated, "Our AI offerings compete with AI products from hyperscalers such as Amazon and Google, as well as products from other emerging competitors, including Anthropic, OpenAI, Meta, and other open source offerings, many of which are also current or potential partners."

The past year has been eventful for both companies. Tensions grew when Microsoft CEO Satya Nadella was reportedly not informed before OpenAI’s board temporarily ousted CEO Sam Altman in November. Following Altman’s quick reinstatement, Microsoft was given a non-voting board seat at OpenAI, a position it relinquished earlier this month.