Microsoft has given up its board observer seat at OpenAI in a move aimed at easing U.S. and UK antitrust regulators’ concerns about the extent of its control over the AI startup amid the soaring popularity of generative artificial intelligence.
This change however, is unlikely to resolve concerns by the U.S. Federal Trade Commission according to one source, meanwhile, The FTC is conducting an antitrust review of deals by Big Tech firms and top AI companies.
Microsoft took a non-voting, observer position on OpenAI’s board in November after OpenAI CEO Sam Altman took back the reins of the company.
The seat meant Microsoft could attend OpenAI’s board meetings and access confidential information but had no voting rights on matters including electing or choosing directors.
An OpenAI spokesperson said the company would establish a new approach to engaging with stakeholders by hosting regular meetings with strategic partners such as Microsoft and Apple, and investors such as Thrive Capital and Khosla Ventures amid rising regulation & antitrust concerns.
The observer seat and Microsoft’s more than $10 billion investment in OpenAI have triggered unease among antitrust watchdogs in the European Union, Britain and the U.S. over how much control it exerts over OpenAI as the position provided deep, first-hand insights into the board’s work.
Apple was slated to take an advisory board role as well after striking a deal to integrate ChatGPT into its products last month, Bloomberg News previously reported, but any such plan will not go ahead. OpenAI confirmed its board will not include any advisory seats going forward.
Microsoft, however, cited OpenAI’s new partnerships, innovation and growing customer base since Altman’s return to the startup as reasons for giving up its observer seat. (right)
Apple on the other hand refused to provide any comments.
Moreover, 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 tech company Inflection to head its consumer AI division, a move widely interpreted as an effort to diversify beyond OpenAI.
Could this be the end of a partnership and the beginning of a mega-rivalry? Only time will tell.
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