NAIROBI, Kenya- Microsoft has decided to relinquish its board observer seat at OpenAI, a position that has sparked regulatory concerns.
This move follows significant improvements in OpenAI’s governance over the past eight months.
Microsoft’s observer role, established last November after OpenAI CEO Sam Altman resumed control, allowed the tech giant to attend board meetings and access confidential information without voting rights.
Despite a hefty $10 billion investment in OpenAI, Microsoft now believes its limited role is no longer necessary.
“Over the past eight months, we have witnessed significant progress by the newly formed board and are confident in the company’s direction. Given all of this, we no longer believe our limited role as an observer is necessary,” Microsoft stated in a letter to OpenAI dated July 9.
Interestingly, Apple, which recently announced integrating OpenAI’s ChatGPT into its devices, was expected to assume the observer role but has decided against it.
According to the Financial Times, Apple will not take up the observer seat, although the company has not commented on this decision.
In place of board observers, OpenAI plans to implement a new engagement approach. The AI startup will host regular stakeholder meetings with strategic partners like Microsoft and Apple, as well as investors such as Thrive Capital and Khosla Ventures.
This strategy aims to maintain strong collaboration without the need for board observer positions.
An OpenAI spokesperson emphasized the importance of these partnerships and the value of ongoing dialogue with stakeholders.
Microsoft’s observer seat and substantial investment in OpenAI have raised concerns among antitrust regulators in Europe, the UK, and the US about the level of control Microsoft may exert over OpenAI.
Although EU regulators have stated that the partnership does not fall under the bloc’s merger rules, they are seeking third-party views on the exclusivity clauses in the agreement.
As competition heats up, Microsoft and OpenAI are both striving to sell AI technology to enterprise customers. This not only generates revenue but also aims to demonstrate their independence and address antitrust concerns.
In a move to diversify beyond OpenAI, Microsoft is expanding its AI offerings on the Azure platform and has recently hired Inflection’s CEO to lead its consumer AI division.
