Microsoft Cites OpenAI as a Rival

 

"Microsoft named OpenAI among its significant rivals, acknowledging that its most important partner in artificial intelligence is also increasingly competing for some of the same business.

The software giant, which has invested more than $13 billion in OpenAI, added the startup to its list of competitors in its fiscal 2024 report filed this week -- the first time Microsoft has designated its partner that way in the annual filing. The maker of ChatGPT joined a shortlist of AI rivals named in the document, including Amazon.com and Google.

The relationship has been crucial for both companies, boosting Microsoft and its Chief Executive Satya Nadella in the race to build sophisticated AI systems while giving OpenAI financial backing to make costly investments required to create those systems.

Microsoft also helped shepherd OpenAI through a tumultuous year and strongly supported Chief Executive Sam Altman through his ouster and subsequent return.

The two companies' fervor for AI, however, has put them increasingly at odds in some promising arenas for the technology. Both are targeting growing adoption of AI by large corporations using it in areas such as customer service and software development.

OpenAI also is making a foray into internet search with the recent launch of SearchGPT, a competitor to Google and Microsoft's ChatGPT-infused Bing search engine, which Nadella last year championed as an early example of how OpenAI's technology could give Microsoft an edge.

OpenAI didn't respond to a request to comment Thursday.

The competition has long been gathering steam.

Last year, OpenAI launched a business version of its ChatGPT tool, taking aim at a core set of customers that Microsoft targets with software such as Word and Excel. Microsoft has its own tool for business customers using OpenAI's technology.

Microsoft also has been amassing AI talent and technology and developing what amounts to an OpenAI competitor inside Microsoft.

The complexity of the relationship has swelled as regulators have begun to scrutinize it.

In its annual report, filed with the U.S. Securities and Exchange Commission after the company's earnings report on Tuesday, Microsoft classified OpenAI as a competitor in AI products. The category includes Microsoft's two biggest cloud-computing rivals -- Amazon and Google -- as well as Meta Platforms and Anthropic, a startup backed by Amazon.

Microsoft said they are part of a broader group, "many of which are also current or potential partners."" [1]

1. Microsoft Cites OpenAI as a Rival. Fitch, Asa.  Wall Street Journal, Eastern edition; New York, N.Y.. 02 Aug 2024: B.4.