In its recent annual report, Microsoft listed OpenAI as a competitor. This comes despite partnerships between companies. 

In 2023, Microsoft announced that it had extended its partnership with OpenAI. Based on the partnership, Satya Nadella, Chairman and CEO, Microsoft said, “We formed our partnership with OpenAI around a shared ambition to responsibly advance cutting-edge AI research and democratize AI as a new technology platform,”  

Microsoft’s investment in OpenAI amounted to a substantial $13 billion. The partnership allows the integration of OpenAI's AI models into Microsoft products and services, both for businesses and consumers. Additionally, Microsoft is the sole provider of cloud services for OpenAI. This means that all of OpenAI's computing and data storage needs are handled through Microsoft's cloud infrastructure. 

Despite this investment, the company now views OpenAI as a direct rival in artificial intelligence and search advertising. Recently, OpenAI announced that it has begun testing its new search engine prototype, SearchGPT. 

Microsoft also included other rivals alongside OpenAI. “Our Search and news advertising business competes with Google, OpenAI, and a wide array of websites, social platforms like Meta,” the company said in the report. This update signals a growing rivalry as OpenAI steps into the competitive search engine. 

However, this is not the first time companies have taken this turn. In 2000, Yahoo and Google were partners, with Google providing search results for Yahoo's website, however, Google outpaced Yahoo in search despite their initial partnership.