Microsoft has resigned from its position as an observer on OpenAI’s board of directors. OpenAI has been under scrutiny from regulators on both sides of the Atlantic. Microsoft said the role was no longer needed, as the AI startup’s governance had improved significantly over the past eight months.
iPhone maker Apple was also expected to take an observer role on OpenAI’s board, but would not do so, the Financial Times reported, citing a person with direct knowledge of the matter. Apple did not respond to a request for comment.
Microsoft took a non-voting observer position on OpenAI’s board of directors last November, after OpenAI CEO Sam Altman retook the reins of the company that operates the generative AI chatbot ChatGPT.
This seat allowed the organization to attend OpenAI’s board meetings and view confidential information, but it did not have voting rights on matters such as electing directors.
Microsoft’s observer status and more than $10 billion investment in OpenAI have raised concerns among antitrust watchdogs in Europe, the UK and the US, citing the extent to which Microsoft has control over OpenAI.
Microsoft cited OpenAI’s new partnerships, innovation and growing customer base since Altman returned to the startup as its reason for stepping down as an observer.
“Over the past eight months, we have seen significant progress from the newly formed board of directors and are confident in the direction the company is heading. Given this, we no longer believe our limited role as an observer is necessary,” it said in a July 9 letter to OpenAI.
The EU’s competition authorities said last month that the partnership would not fall under the bloc’s merger control rules because Microsoft does not control OpenAI. However, they would instead seek outside opinions on the deal’s exclusivity clauses.
However, British and US competition regulators still have concerns and questions about Microsoft’s influence on OpenAI and the latter’s independence.
Microsoft and OpenAI are increasingly competing to sell AI technology to enterprise customers, seeking to generate revenue and demonstrate their independence to regulators to address antitrust concerns.
Additionally, Microsoft is expanding its AI offerings on the Azure platform and has tapped the CEO of Inflection to lead its consumer AI division, a move seen by many as an attempt to diversify away from OpenAI.
© Thomson Reuters 2024
