Photo credit: David Paul Morris/Bloomberg

Microsoft has described startup OpenAI as a “competitor” for the first time in the artificial intelligence and search markets, a recent filing with the Securities Exchange Commission shows.

According to Microsoft’s June 30 10K filing, OpenAI was listed among the Big Tech’s list of AI rivals, including Anthropic, Meta, and Amazon. OpenAI was also named a competitor in the search market, particularly to Microsoft’s Bing search engine, following its unveiling of an AI-powered search engine dubbed the SearchGPT.

Microsoft has a long-standing relationship with OpenAI, having been a major backer since 2019 with an initial investment of $1 billion. Since then, Microsoft’s investment has reportedly ballooned to $13 billion, driving OpenAI’s valuation to an estimated $29 billion.

Beyond investments, OpenAI’s models are integrated into Microsoft’s Azure cloud platform and have been incorporated into products like GitHub Copilot and Microsoft 365 Copilot.

The relationship, however, earned the ire of regulators in the United Kingdom and the European Union, with antitrust watchdogs from both jurisdictions weighing official merger probes. Last month, Microsoft dropped its observer seat on the OpenAI board amid this regulatory scrutiny. Apple had also decided against taking up a similar position.

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The development highlights the relationship dynamics within the tech industry, where partners and competitors are not mutually exclusive titles. Though now seeing OpenAI as a competitor, Microsoft indicated in its 10K that it still views the startup as a crucial partner in its pursuit of AI dominance.

Regardless, Microsoft is building its AI future that’s entirely independent from OpenAI. In March, it recruited the co-founders of Inflection AI to spearhead its new AI division. Additionally, in April, the tech giant announced an investment in Abu Dhabi’s G42 amounting to $1.5 billion, securing a minority stake as part of a broader AI collaboration.

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