SEATTLE (Diya TV) — Microsoft has stepped down from its role on OpenAI’s board, citing improved governance at the AI company since last year’s boardroom upheaval. In a letter on Tuesday, Microsoft announced its immediate resignation from its observer role on OpenAI’s board.
“We appreciate the support shown by OpenAI leadership and the OpenAI board as we made this decision,” Microsoft stated in the letter.
This unexpected move comes as competition regulators intensify their scrutiny of the partnership between Microsoft and OpenAI. Microsoft has invested a staggering $13 billion in the ChatGPT creator, but regulatory bodies in the European Union, the US Federal Trade Commission, and Britain’s competition watchdog are examining the deal closely.
Microsoft’s board seat at OpenAI was a result of a power struggle last year, which saw OpenAI’s CEO, Sam Altman, fired and then quickly reinstated, while the board members behind his removal were ousted. In their letter, Microsoft acknowledged the progress made by the newly-formed OpenAI board over the past eight months, expressing confidence in the company’s direction.
“Given all of this, we no longer believe our limited role as an observer is necessary,” Microsoft noted.
With Microsoft’s departure, OpenAI will no longer have observer seats on its board. OpenAI expressed gratitude towards Microsoft for their confidence and affirmed their commitment to continuing the successful partnership.
Alex Haffner, a competition partner at UK law firm Fladgate, suggested that Microsoft’s decision to leave the board was likely influenced by the increasing regulatory scrutiny on big tech companies and their connections with AI startups.
“Regulators are very much focused on the complex web of inter-relationships that big tech has created with AI providers. Hence, the need for Microsoft and others to carefully consider how they structure these arrangements going forward,” Haffner explained.
OpenAI plans to adopt a new approach for “informing and engaging key strategic partners,” such as Microsoft and Apple, as well as investors like Thrive Capital and Khosla Ventures. The company will host regular meetings to update stakeholders on progress and ensure stronger collaboration on safety and security.
Microsoft and Apple have both decided against taking board roles at OpenAI, highlighting the growing regulatory pressure on Big Tech’s influence over artificial intelligence. European and US regulators have voiced concerns about Microsoft’s influence over OpenAI, pushing Microsoft to demonstrate an arm’s-length relationship. Microsoft has integrated OpenAI’s services into its Windows and Copilot AI platforms and is banking on AI to drive growth.
In response to regulatory scrutiny, Microsoft stated, “Over the past eight months, we have witnessed significant progress from the newly formed board and are confident in the company’s direction. We no longer believe our limited role as an observer is necessary.”
Microsoft is facing broader scrutiny over its alleged dominance in artificial intelligence. US authorities have launched separate investigations into Microsoft’s role in the AI field and its deal with Inflection AI, while European regulators are surveying Microsoft’s rivals about OpenAI’s exclusive use of its technology.
The UK’s competition regulator is also considering a deeper investigation into Microsoft’s partnership with OpenAI. Additionally, the UK is scrutinizing Amazon’s $4 billion collaboration with AI company Anthropic, concerned that large tech companies are using partnerships to shield themselves from competition. The US is probing Nvidia’s dominance over AI chips.
Big US tech companies, including Microsoft, Nvidia, Alphabet, and Amazon, have invested heavily in AI businesses. While these investments provide essential support for AI startups, regulators fear they may concentrate access to innovative large language models among the tech giants already dominating other platforms.
