Microsoft Places OpenAI on List of AI/Search Rivals

Microsoft and artificial intelligence (AI) startup OpenAI are often referred to as partners.

Now, they’re also rivals.

The tech giant has added OpenAI to its list of competitors, according to a Thursday (Aug. 1) report by The Wall Street Journal (WSJ), citing Microsoft’s fiscal 2024 report. That document places OpenAI in the company of other AI rivals such as Amazon and Google.

Microsoft said they are part of a larger group, “many of which are also current or potential partners.” Microsoft counts OpenAI among its competitors in the search and news advertising fields, along with Google and various social media platforms, the report said.

As the WSJ noted, the relationship between the two firms has been critical, with Microsoft turning to OpenAI for help in building AI systems, while also giving the smaller company the financial backing — to the tune of $13 billion — to help develop its systems.

However, the companies’ desire to tap a greater share of the AI market is putting them at odds as they go after wider usage of the technology by larger organizations that want to use AI for things like software development and customer service.

OpenAI is also moving into the search realm, competing with both Microsoft and Google with a new tool called SearchGPT.

“OpenAI’s move comes amid a broader industry shift toward AI-enhanced search capabilities,” PYMNTS wrote recently.

For example, Microsoft’s Bing search engine recently debuted a test feature called “Bing generative search,” which employs AI to summarize search results. This development follows Google’s previous attempt at AI summaries, which the company pulled back after the tool had issues with spreading misinformation.

OpenAI is one of several leveraging AI in search. As PYMNTS CEO Karen Webster wrote in November, Google has been turning to AI to enhance search for more than two decades. The tech giant further increased its AI focus in 2017 with the advent of its Google AI division, which has been trying to innovate large language models (LLMs) and leveraging Google’s massive search dataset.

Advanced natural language processing capabilities are at the heart of SearchGPT’s innovation.

Dmytro Shevchenko, a data scientist from Aimprosoft, told PYMNTS that the technology lets the search engine understand the nuances, context and intent of user queries, enabling more nuanced responses tailored to user intent.

Shevchenko describes the difference in SearchGPT’s approach: “If a user asks, ‘What are some quick dinner recipes?’ SearchGPT realizes that the user wants a quick and convenient meal. Therefore, it can suggest a pasta recipe that cooks in 20 minutes and explain why it’s a good choice.”