Microsoft and Apple Abandon OpenAI Seats Amid Antitrust Investigation!

  • Editor
  • July 11, 2024
    Updated
Antitrust-Scrutiny-Leads-Microsoft-and-Apple-to-Vacate-OpenAI-Seats

Key Takeaways:

  • Microsoft and Apple Exit: Microsoft and Apple have both withdrawn from their planned observer roles on the OpenAI board amid rising antitrust scrutiny.
  • Strategic Shift: OpenAI will implement a new strategy to engage key partners and investors through regular meetings to ensure better collaboration.
  • Regulatory Concerns: The departures are influenced by investigations from regulators in the US, EU, and UK, examining the partnerships between Big Tech and AI startups.
  • Continued Collaboration: Despite the changes, Microsoft remains a crucial partner for OpenAI, continuing their collaboration on AI development and integration.

Microsoft, a significant backer of OpenAI, has recently decided to relinquish its observer seat on OpenAI’s board. This move comes amid escalating antitrust scrutiny from regulators across the globe.

The decision has considerable implications for companies and the broader AI development and regulation.

Microsoft has relinquished its seat on the board of OpenAI, saying its participation is no longer needed because the ChatGPT maker has improved its governance since being roiled by boardroom chaos last year.


In a Tuesday letter, Microsoft confirmed it was resigning, “effective immediately,” from its role as an observer on the artificial intelligence company’s board.

“We appreciate the support shown by OpenAI leadership and the OpenAI board as we made this decision,” the letter said.

The surprise departure comes amid intensifying scrutiny from antitrust regulators of the powerful AI partnership. Microsoft has reportedly invested $13 billion in OpenAI.


European Union regulators said last month that they would take a fresh look at the partnership under the 27-nation bloc’s antitrust rules, while British competition watchdogs have also been looking into the deal.

OpenAI’s eight-person board includes Altman as well as Lawrence Summers, the former US Treasury secretary, and Fidji Simo, chief executive of grocery delivery company Instacart. It is chaired by Bret Taylor, former co-CEO of Salesforce and co-founder of AI start-up Sierra.

Regulatory Scrutiny and Strategic Changes

Apple had also been anticipated to take an observer role on OpenAI’s board as part of a deal to integrate ChatGPT into its devices. However, Apple will not proceed with this plan, according to a source with direct knowledge of the matter. The company declined to comment on the decision.

Instead, OpenAI will conduct regular meetings with partners, including Microsoft and Apple, as well as investors such as Thrive Capital and Khosla Ventures.


This is part of “a new approach to informing and engaging key strategic partners,” overseen by Sarah Friar, the former CEO of Nextdoor, who recently joined OpenAI as its first chief financial officer, an OpenAI spokesperson said.

Microsoft took the board seat following a power struggle in which OpenAI CEO Sam Altman was fired, then quickly reinstated, while the board members behind the ouster were pushed out.

“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 of this, we no longer believe our limited role as observers is necessary.”

With Microsoft’s departure, OpenAI will no longer have observer seats on its board.

“We are grateful to Microsoft for voicing confidence in the Board and the direction of the company, and we look forward to continuing our successful partnership,” OpenAI said in a statement.

The move also comes as antitrust authorities in the EU and US examine the partnership between Microsoft and OpenAI as part of broader concerns about competition in the rapidly growing sector.

OpenAI’s website states it “remains an entirely independent company governed by the OpenAI Nonprofit”. Microsoft and OpenAI have played down their ties as antitrust concerns have grown.


The European Commission said in June it was exploring the possibility of an antitrust investigation into the tie-up after it said it would not proceed with a probe under merger control rules.

The Federal Trade Commission in the US has also begun scrutinising investments made by big tech companies, including Microsoft, Amazon and Google into generative AI start-ups.


OpenAI has emphasized its commitment to improving governance and maintaining robust safety standards in AI development. The organization plans to engage strategic partners, including Microsoft and Apple, through regular stakeholder meetings to foster collaboration on safety and security.

For more news and insights, visit AI News on our website.

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Dave Andre

Editor

Digital marketing enthusiast by day, nature wanderer by dusk. Dave Andre blends two decades of AI and SaaS expertise into impactful strategies for SMEs. His weekends? Lost in books on tech trends and rejuvenating on scenic trails.

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