Microsoft has left its observer seat at OpenAI’s board. Microsoft claimed it was unnecessary because the AI startup’s governance had greatly improved over the previous eight months. However, leaving its board observer seat has received regulatory attention.
Microsoft joined OpenAI’s board as an observer in November of last year, following the reinstatement of OpenAI CEO Sam Altman, but without voting rights. Because of the seat, Microsoft could view private material and attend board meetings of OpenAI. Still, it was not able to vote on issues such as selecting or electing directors. The observer seat and Microsoft’s over $10 billion investment in OpenAI have caused antitrust regulators in the US, UK, and Europe.
Authorities in the United States and Britain are concerned about Microsoft’s influence over OpenAI’s independence, even though the EU has stated that the Microsoft-OpenAI cooperation does not comply with its merger requirements. Microsoft and OpenAI are aggressively competing for commercial clients in the rapidly expanding AI Market to address concerns about antitrust and demonstrate their continued independence. In addition, Microsoft has made important leadership hiring decisions. It is diversifying its AI portfolio on the Azure platform, suggesting it may be planning to lessen its dependency on OpenAI.
With Altman’s return to the startup, OpenAI has expanded its customer base, forged new collaborations, and shown innovation. Microsoft stated, “Over the past eight months, we have witnessed significant progress by the newly formed board and are confident in the company’s direction.” In light of everything, we no longer see the need for our restricted observer role.
Meanwhile, Apple decided not to become a board observer at OpenAI, although its products integrated with ChatGPT. According to sources, OpenAI also does not want to provide these positions. A company spokesman said OpenAI will interact with significant players like Apple and Microsoft through frequent meetings. In response to the increasing antitrust monitoring, this new strategy seeks to promote cooperation while preserving a certain level of isolation.