Microsoft’s Changing Attitude Towards OpenAI

According to Microsoft’s regularly updated list of competitors, Microsoft and OpenAI are both involved in the fields of search and AI, making them direct competitors.

Despite a rocky relationship, Microsoft and OpenAI have been working together this year. In March, there were reports that the founder and CEO of OpenAI, Sam Altman, was ousted from the board without notifying Satya Nadella, the head of Microsoft who has been leading the collaboration.

Recently, Microsoft has revised its list of competitors to include OpenAI as a rival in the field of AI and search.

“According to the company’s most recent annual report, our AI products face competition from those offered by major players like Amazon and Google, as well as emerging competitors such as Anthropic, OpenAI, Meta, and other open source offerings. Many of these competitors are also current or potential partners of ours.”

OpenAI’s technology is a crucial component in many of Microsoft’s AI products. Some businesses prefer to directly pay OpenAI for utilizing its models, while others opt to use Microsoft’s Azure OpenAI Service.

In addition, OpenAI recently revealed SearchGPT, an AI-based search engine that is not currently accessible to the public, but is positioned to directly rival Microsoft’s Bing.

According to an OpenAI spokesperson, the dynamic between the two companies has not shifted and they have always intended to compete. The spokesperson reassured that Microsoft continues to be a valuable partner to OpenAI.

OpenAI and the Redmond-based company have had a strong partnership for a significant amount of time. The latter holds approximately 49% of OpenAI’s equity, after investing $13 billion, as reported by Fortune. Additionally, the Redmond-based company offers its computing resources to OpenAI through its Microsoft Azure cloud platform.

According to The Information, OpenAI is rapidly depleting its cash reserves and is projected to invest approximately $7 billion in AI training and an additional $1.5 billion in staffing.

Despite having a major investor in Microsoft, the startup may still be facing bankruptcy and could require additional funding in order to survive. There is speculation that the tech giant may intervene to help the company stay afloat.