On Tuesday, Microsoft said that it is giving up its seat on the OpenAI board amid antitrust authorities’ scrutiny of the two firms’ partnership. In a letter to OpenAI, Microsoft said its presence on the board was no longer necessary.
Also read: Microsoft signs carbon credit deal with Occidental to tackle AI-related emissions
Microsoft’s resignation is effective immediately after being on the board since last November. The resignation also means OpenAI no longer has an observer seat on its board.
Microsoft’s departure ends OpenAI’s observer seats
Microsoft took a seat on the OpenAI board in November following a chaotic period at the firm, which resulted in CEO Sam Altman’s abrupt sacking. Altman was reinstated a few days later after board members who orchestrated his ouster were fired. Microsoft CEO Satya Nadella was critical in restoring order during the boardroom squabbles.
Now, the tech giant has indicated confidence in the board after eight months of serving as an observer.
“Over the past eight months, we have witnessed significant progress by the newly formed board and are confident in the company’s direction,” Microsoft said in its letter.
“Given all this we no longer believe our limited role as an observer is necessary.”
Microsoft.
Responding to the resignation, OpenAI indicated that they will continue to collaborate with Microsoft, holding regular meetings with the firm and investors Thrive Capital and Khosla Ventures.
Recently, Bloomberg reported that the firm had wanted to give Apple an observer seat on the board through its executive Phil Schiller. In June, both firms announced a deal to integrate ChatGPT into Apple’s devices. After Microsoft’s departure, OpenAI is not planning on having an observer seat again on its board, according to an Axios report citing sources familiar with the developments.
Antitrust authorities pressure big techs
Microsoft’s departure comes amid growing pressure from antitrust regulators who are scrutinizing big tech firms’ investments in AI startups. The tech giant has invested $13 billion in OpenAI, a partnership that has been instrumental in the startup’s success as it relied on Microsoft for cloud storage and computing power.
Antitrust authorities in both the US and EU scrutinize the partnership between the two as part of “broader concerns about competition in the growing sector.”
Also read: OpenAI to join Washington tech lobbying group BSA
According to the Financial Times, Microsoft and OpenAI have “played down” their partnership as antitrust worries continue. Last month, the EU Commission revealed that it was considering an antitrust investigation into the partnership. The Federal Trade Commission (FTC) in the US has also started dissecting other investments by big tech firms including Amazon, Microsoft, and Google into AI startups.
Cryptopolitan reporting by Enacy Mapakame
