Microsoft and Apple Withdraw from OpenAI Board Membership Due to Regulatory Scrutiny
These regulators questioned the extent of Microsoft's control over OpenAI and its potential influence on the startup's operations.
Microsoft has officially announced its decision to step down from OpenAI's board. This development occurred roughly a year after Microsoft's investment of $13 billion in OpenAI in April 2023. According to a news report by Reuters, Microsoft has issued a letter to OpenAI declaring its board departure, referencing an anonymous source acquainted with the situation.
In the letter, Microsoft expressed confidence in OpenAI's progress under the newly formed board and stated that their limited role as an observer is no longer necessary. "Over the past eight months, we have witnessed significant progress from the newly formed board and are confident in the company’s direction," the memo read. "We no longer believe our limited role as an observer is necessary."
Contrary to earlier expectations, Apple will not take up an observer role on OpenAI’s board. This decision follows Apple's recent announcement to integrate OpenAI's ChatGPT into its devices. People with direct knowledge of the matter reported that Apple would not pursue the board observer position.
Microsoft's observer seat and its substantial $10 billion investment in OpenAI had sparked concerns among antitrust regulators in Europe, Britain, and the U.S. These regulators questioned the extent of Microsoft's control over OpenAI and its potential influence on the startup's operations.
While EU antitrust regulators determined that the partnership did not fall under the bloc's merger rules, they decided to seek third-party views on the exclusivity clauses in the agreement. In contrast, British and U.S. antitrust watchdogs continue to express concerns about Microsoft's influence over OpenAI.
As Microsoft and OpenAI increasingly compete to sell AI technology to enterprise customers, both companies aim to demonstrate their independence to regulators to address antitrust concerns. Microsoft is expanding its AI offerings on the Azure platform and has recently hired Inflection's CEO to head its consumer AI division. This move is widely seen as an effort to diversify beyond its partnership with OpenAI.
