Microsoft has given up its seat as an observer on the board of OpenAI while Apple will not take up a similar position, amid growing scrutiny by global regulators of Big Tech’s investments in AI start-ups, according to Axios.
Microsoft, which has invested $13 billion in the maker of the generative AI chatbot ChatGPT, announced its withdrawal from the board role effective immediately. Apple, which had been expected to take an observer role as part of a deal to integrate ChatGPT into its devices, will not do so either, according to sources. Apple declined to comment on the matter.
OpenAI will instead host regular meetings with partners such as Microsoft, Apple, and investors like Thrive Capital and Khosla Ventures. This is part of “a new approach to informing and engaging key strategic partners” under Sarah Friar, OpenAI’s first chief financial officer.
The decision comes as antitrust authorities in the EU and the US examine the partnership between Microsoft and OpenAI amid broader concerns about competition in the AI sector. Microsoft had accepted a non-voting role on the board following last year’s upheaval when OpenAI’s CEO Sam Altman was briefly ousted by the board.
Microsoft’s Deputy General Counsel Keith Dolliver noted in a letter to OpenAI that their position had provided insights without compromising the board’s independence, but significant progress from the newly formed board made the role unnecessary. Microsoft continues to consider OpenAI one of its most valued partners.
The partnership between Microsoft and OpenAI has been crucial to OpenAI’s success, providing computing power and cloud storage worth billions. Microsoft’s CEO Satya Nadella played a key role during the boardroom crisis at OpenAI.
Investing in OpenAI has given Microsoft an early lead in the generative AI race. Demand for its AI services has driven accelerated sales at its Azure cloud computing platform over the past three quarters. Microsoft does not hold a conventional equity stake in OpenAI but is entitled to a share of profits from an OpenAI subsidiary.
Both Microsoft and OpenAI have downplayed their ties as antitrust concerns have grown. The European Commission is exploring the possibility of an antitrust investigation into the partnership, and the US Federal Trade Commission is scrutinizing investments by Big Tech companies, including Microsoft, into generative AI start-ups.
OpenAI’s board includes CEO Sam Altman, former US Treasury Secretary Larry Summers, and Instacart CEO Fidji Simo, with Bret Taylor, former co-CEO of Salesforce, serving as chairman. OpenAI remains an independent company governed by the OpenAI Nonprofit.
An OpenAI spokesperson expressed gratitude to Microsoft for its confidence in the board and the company’s direction, looking forward to continuing their successful partnership.