Microsoft drops observer seat on OpenAI board amid regulator scrutiny
Microsoft has withdrawn its observer seat on the OpenAI board, which means Apple will no longer be able to appoint an executive to a similar role. This decision comes amid regulatory scrutiny of big tech companies and their relationships with artificial intelligence startups.
Microsoft's Withdrawal
Microsoft, the largest financial backer of the ChatGPT developer, announced the withdrawal of its observer seat in a letter to the startup. The resignation of the observer role, which does not carry a vote in board decisions, was deemed "effective immediately" by Microsoft.
According to Microsoft, OpenAI has made significant progress under its new board, particularly in terms of safety, culture, and overall direction. This progress led Microsoft to believe that its limited role as an observer was no longer necessary.
Regulatory Concerns
However, it is believed that Microsoft's decision was also influenced by concerns raised by competition regulators. In the UK, the Competition and Markets Authority is reviewing whether the Microsoft and OpenAI partnership constitutes "an acquisition of control." Meanwhile, the Federal Trade Commission in the US is also investigating the partnership.
The European Commission, while not conducting a formal merger review, is scrutinizing exclusivity clauses in the agreement between Microsoft and OpenAI.
OpenAI's New Approach
OpenAI, based in San Francisco, is adopting a new approach to engaging with strategic partners such as Microsoft and Apple, as well as other financial investors. The startup will no longer have board observers under this new approach, effectively ruling out Apple from taking up a similar role.
As part of this new strategy, OpenAI will host regular stakeholder meetings to share progress on its mission and ensure stronger collaboration across safety and security efforts. The startup looks forward to continued feedback and advice from key stakeholders.
Regulator Scrutiny on AI Investments
Regulators are increasingly scrutinizing investments in AI startups. The FTC is examining tie-ups between Anthropic, the company behind the Claude chatbot, and tech giants like Google and Amazon. In the UK, the CMA is also investigating partnerships involving Amazon, Anthropic, Mistral, and Inflection AI.
It is evident that the regulatory environment has played a significant role in shaping decisions within the tech industry, prompting companies like Microsoft to carefully consider their partnerships and arrangements moving forward.
