August 1st, 2024

Microsoft says OpenAI is now a competitor in AI and search

Microsoft has classified OpenAI as a competitor in its annual report, reflecting a shift in their relationship amid OpenAI's SearchGPT launch, despite ongoing collaboration and Microsoft's significant investment in OpenAI.

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Microsoft says OpenAI is now a competitor in AI and search

Microsoft has officially classified OpenAI as a competitor in its latest annual report, despite their long-standing partnership. This change follows OpenAI's recent announcement of a prototype search engine called SearchGPT. Microsoft, which has invested approximately $13 billion in OpenAI, has historically been its exclusive cloud provider and has integrated OpenAI's AI models into its products. The inclusion of OpenAI in the competitor list indicates a shift in their relationship, as both companies now appear to be encroaching on each other's markets, particularly in AI and search advertising.

An OpenAI spokesperson clarified that the partnership remains intact and was established with the understanding that competition would exist. Microsoft continues to offer its own AI solutions, such as the Copilot chatbot, which is available through Bing and Windows. The dynamics between the two companies have been tumultuous, especially following the brief ousting and reinstatement of OpenAI CEO Sam Altman. Microsoft CEO Satya Nadella has maintained a close relationship with Altman, emphasizing the ongoing collaboration despite the competitive landscape. Additionally, Nadella has expanded Microsoft's AI initiatives by appointing Mustafa Suleyman, a co-founder of DeepMind, to lead a new AI unit within the company.

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Link Icon 9 comments
By @throwoutway - 9 months
This is to prevent securities fraud (frivolous) lawsuits. OpenAI launched a search thing so If MSFT don't list it as a competitor, then someone would one day sue them for securities fraud https://www.bloomberg.com/opinion/articles/2019-06-26/everyt...
By @vasili111 - 9 months
From article:

> Nadella remains close to Altman.

> “One of the things I love about Sam is every day he’s calling me and saying, ‘I need more, I need more, I need more,’” Nadella told The New York Times in a recent interview.

By @bdcravens - 9 months
Competition and partnership aren't necessarily mutually exclusive. Apple still has a major dependency on Samsung for components.
By @LASR - 9 months
With Meta giving out models for free, I wonder what competition even means in this space now.
By @echelon - 9 months
OpenAI is trying to create AGI, but it's unclear whether or not that will pan out.

They're also scrambling to create lots of products, but they don't seem to have a moat thanks to open models and fierce competition.

OpenAI has the most diverse assortment of models, APIs, and products, but that won't matter if other verticals or platforms can out-compete with hyper focus.

So half of the company is trying to will a new FAANG into existence within a few short years. That's pretty wild, honestly, and I wish them the best of luck.

The other half of the company is trying to create an AGI god. It feels like DeepMind is much better poised to make progress here.

By @evilfred - 9 months
meanwhile Ed Zitron makes a convincing case that MS basically owns OpenAI...
By @hipadev23 - 9 months
Of course they say that: Microsoft wants to avoid another high-profile antitrust case.
By @debacle - 9 months
MS just got their butt handed to them on the Nasdaq. I expect they're scrambling.