Microsoft calls OpenAI a competitor. This is somewhat surprising given the partnership between the two, where OpenAI innovations are almost immediately translated into innovations within the Microsoft portfolio.

Microsoft calls OpenAI a competitor in its quarterly report. In this report, in the “Competition” section, we read: “Our AI offering competes with AI products from hyperscalers such as Amazon and Google, but also with products from other emerging competitors, including Anthropic, OpenAI, Meta, and other open source offerings, of which there are many current or potential partners.”

This little sentence is interesting. OpenAI is certainly a current partner of Microsoft. In fact, Microsoft is OpenAI’s sugar daddy, investing millions to enable the company to develop new GPT models. Not so bluntly: Microsoft made ChatGPT possible. In return, the company gets something in return: the entire CoPilot offering is essentially a version of ChatGPT with a Microsoft shell.

Since Microsoft entered into a relationship with OpenAI, the company has invested around thirteen billion dollars. Redmond is also investing in other AI start-ups, and that is where the problem lies.

Partner or competitor?

If we see OpenAI as a loyal partner of Microsoft, innovating in line with Redmond’s interests, then Microsoft has a very dominant market position in AI. Acquisitions of other AI startups could disrupt competition in the market. This view is not so hypothetical: the European Commission has been viewing the relationship between OpenAI and Microsoft with suspicion since the beginning of this year and is said to be working on an antitrust investigation.

However, if Microsoft is a competitor to OpenAI, the cards are shuffled quite differently. Then OpenAI is the big player and Microsoft is nothing more than another relevant party in the AI ​​market. In this relationship, there is no dominance or unfair competition in AI-related acquisitions.

perception

So Microsoft has every advantage in portraying OpenAI as a competitor, whether that’s true or not. The company seems to be hiding in its SEC filing by calling OpenAI a competitor. There’s some truth to that, of course: If you subscribe to ChatGPT, you’re unlikely to also subscribe to CoPilot. But the close collaboration between the two companies, combined with the huge investments, suggests that this is more than a classic partner-competitor relationship.

Microsoft is feeling the heat of antitrust investigations and is still taking preemptive measures to avoid them. For example, last month the company resigned from its role as an observer on OpenAI’s board to once again counteract the perception of interconnectedness. Whether all this will be enough to convince the EU and other global competition authorities remains to be seen.