OpenAI and Microsoft Are Partners, Until They Vie for the Same Customers

OpenAI’s ChatGPT has enraptured the business world since its November release and OpenAI is signing up customers eager to pay to use its artificial intelligence models in their own products. But the Microsoft-backed startup faces a surprising rival: Microsoft itself.

As part of its multibillion-dollar investment in OpenAI, Microsoft has the rights to sell the startup’s software through its Azure cloud business, even as OpenAI licenses its own software directly to customers. Microsoft also gets a share of OpenAI’s profits. The offerings cost the same, a fraction of a cent per query. Meanwhile, all of OpenAI’s technology runs on Microsoft’s Azure cloud infrastructure rent free.

The dual offerings mean the companies are at times pitching the same customers on nearly identical products, putting salespeople at Microsoft in the uneasy position of trying to lure customers away from OpenAI while touting its technology.