Microsoft's AI Dilemma: Partner Turned Competitor

Bloomberg reports that Microsoft finds itself in an ironic position: despite aggressively promoting its Copilot AI assistant to enterprises, employees at major corporations are increasingly opting for OpenAI's ChatGPT instead. This unexpected competition comes despite Microsoft's $14 billion investment in OpenAI.

Case Study: Amgen's AI Switch

The pharmaceutical giant Amgen exemplifies this market shift. After announcing a company-wide adoption of Microsoft Copilot for its 20,000 employees last spring - becoming a flagship Microsoft AI customer - Amgen staff began migrating to ChatGPT just 13 months later.

"OpenAI's success lies in making their product remarkably engaging," explained Sean Bruehich, Amgen's Senior Vice President. He noted ChatGPT excels at research and scientific literature summarization, while Copilot shows stronger integration with Microsoft's own software suite.

Enterprise Market Tensions Escalate

The situation creates complex dynamics between the two tech partners. As OpenAI's largest investor, Microsoft now competes directly with its own beneficiary in the lucrative enterprise AI market.

Microsoft sales teams reportedly struggle to articulate Copilot's value proposition, even as the company pushes for rapid customer acquisition. Meanwhile, OpenAI actively expands its enterprise offerings, recently acquiring code assistant Windsurf to compete with Microsoft's GitHub Copilot.

Technical Differences Drive Preferences

Though both products leverage OpenAI language models, key distinctions emerge:

• Update Speed: OpenAI model updates take weeks to reach Microsoft products due to additional security testing
• User Familiarity: Many professionals already use ChatGPT personally before workplace adoption
• Specialized Performance: ChatGPT demonstrates superior capability in certain niche applications

Microsoft defends its slower update cycle as necessary for enterprise-grade security and user experience validation.

Corporate Adoption Strategies Diverge

Companies approach the Copilot vs. ChatGPT decision differently:

• New York Life Insurance: Testing both with 12,000 employees before final selection
• Finastra: Opting for Copilot due to deep Office software integration
• Bain Consulting: Deploying ChatGPT to 16,000 staff with limited Copilot use

Market Outlook and Pricing Battle

OpenAI reports 3 million paying enterprise users (50% growth in months), while Microsoft claims Copilot serves 70% of Fortune 500 companies with doubled paid users year-over-year.

The pricing battle intensifies:

• Microsoft Copilot: $30/user/month
• ChatGPT Enterprise: $60/user/month (with usage-based options)

Key Points:

1. Microsoft faces unexpected competition from its own OpenAI investment
2. Enterprise users show strong preference for ChatGPT despite Microsoft integrations
3. Update cycles and specialized capabilities drive adoption decisions
4. Corporate strategies vary from dual testing to platform commitment
5. Pricing models and growth metrics indicate a heated market battle