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Stocktwits - OpenAI is reportedly working on a productivity software suite that would directly challenge one of its biggest investors and business partners, Microsoft (NASDAQ:MSFT), as well as Alphabet-led (GOOGL/GOOG) Google (NASDAQ:GOOGL).
Microsoft’s stock edged 0.8% higher during afternoon trade on Tuesday, while Alphabet’s stock rose 1.4% after Citi raised its price target to $203 from $200 on Search and YouTube strength.
According to a report by The Information, OpenAI’s forthcoming offering includes collaborative tools that allow users to edit documents and communicate via chat within ChatGPT, which puts it head-to-head against Microsoft Office and Google Workspace.
The features, still under development, suggest that the company is aiming to expand its reach from AI chatbots into the broader software productivity market.
On Stocktwits, retail sentiment around the startup improved to ‘bullish’ from ‘neutral’ territory a day ago.
Internal planning for the tools began more than a year ago, but development faced delays due to engineering constraints, the report said. OpenAI has recently accelerated work on these features, including the launch of “Canvas,” an experimental tool that helps users generate and refine code and documents more efficiently using AI.
The expansion into productivity software could place OpenAI in direct competition with Microsoft, which has invested billions into the startup and integrated its Copilot models, which use OpenAI’s GPT-4, across its suite of Office products.
The emerging dual relationship between the two companies, as both partner and potential competitor, raises questions about how far OpenAI will venture into Microsoft’s territory.
Microsoft is reportedly already losing the battle to OpenAI, with companies opting for ChatGPT over its Copilot AI assistant. OpenAI has also made deals with rival cloud computing companies, and spend a lot of time on building out its paid subscription model. On the flip side, Microsoft initially invested almost $14 billion in OpenAI, but has since also pumped money into rival AI startups.
The news comes after ChatGPT reportedly reached $10 billion in annual recurring revenue (ARR) earlier this month and has a target of $125 billion by 2030.
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