AI startup: Microsoft gives up observer position on OpenAI’s board of directors
AI startup: Microsoft has given up its observer position on OpenAI’s board of directors, the subject of regulatory scrutiny on both sides of the Atlantic, saying it was no longer necessary after the AI startup’s governance had improved significantly over the past eight months. iPhone maker Apple had also been expected to take an observer role on OpenAI’s board of directors but will 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 in November last year after OpenAI CEO Sam Altman stepped back from the reins of the company that operates the generative AI chatbot ChatGPT. The position meant it could attend OpenAI board meetings and have access to confidential information, but it did not have the right to vote on matters such as the appointment or election of directors. Microsoft’s observer status and more than $10 billion investment in OpenAI has raised concerns among antitrust watchdogs in Europe, Britain and the United States about how much control it exerts over OpenAI. Microsoft cited OpenAI’s new partnerships, innovation and growing customer base since Altman’s return to the startup in stepping down from his observer position. “Over the past eight months, we have seen significant progress by the newly formed board of directors and are confident in the direction of the company. Given all this, we no longer believe that our limited role as an observer is necessary,” he said in a letter to OpenAI on July 9. EU antitrust regulators said last month that the partnership would not be subject to the bloc’s merger rules because Microsoft does not control OpenAI, but would instead seek third-party opinions on the exclusivity terms of the deal. In contrast, British and US antitrust watchdogs have concerns and questions about Microsoft’s influence over OpenAI and the latter’s independence. Microsoft and OpenAI are increasingly competing to sell AI technology to enterprise customers, aiming 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 hired the CEO of Inflection to lead its consumer AI division, a move widely interpreted as an effort to diversify beyond OpenAI.
