Microsoft has announced that OpenAI has become a competitor in the field of AI and search.

• OpenAI has been added to Microsoft's annual list of competitors, which is updated annually.
• The change comes days after OpenAI announced a prototype of a search engine.
• Microsoft has reportedly invested $13 billion into OpenAI.

's relationship with OpenAI has officially become more complicated.

Microsoft included the artificial intelligence startup in its latest annual report's list of competitors, which has long featured mega-cap peers such as Amazon, Apple, and Facebook, including Meta.

Microsoft has a long-term partnership with OpenAI, with Microsoft serving as OpenAI's exclusive cloud provider and using OpenAI's AI models in its products for commercial clients and consumers. Microsoft is also OpenAI's biggest investor, having invested a reported $13 billion in the company.

But the new casting indicates they're moving onto one another's turf.

Microsoft identified OpenAI, the developer of the ChatGPT chatbot, as a competitor in AI offerings and search and news advertising. Last week, OpenAI unveiled a prototype of a search engine called SearchGPT.

Microsoft's Azure OpenAI Service and Copilot chatbot are alternative options for companies seeking an alternative to ChatGPT.

OpenAI's spokesperson informed CNBC that their partnership with Microsoft was established with the understanding that they would compete, and that nothing has changed about their relationship.

Still, it's been a drama-packed year.

Microsoft CEO Satya Nadella was not informed before OpenAI's board removed CEO Sam Altman in November. After Altman was reinstated, OpenAI granted Microsoft a non-voting board seat. Microsoft recently surrendered the position.

In March, Nadella appointed Mustafa Suleyman, a co-founder of DeepMind, as CEO of a new unit called Microsoft AI. Suleyman, who had previously founded and led startup Inflection AI, was joined by several Inflection employees in his new role.

Nadella remains close to Altman.

Nadella stated in a recent interview with The New York Times that one of the things he loves about Sam is how he calls him every day and says, "I need more, I need more, I need more."

WATCH: OpenAI announces a search engine called SearchGPT