Microsoft, Apple Won’t Join OpenAI Board Amid Growing Regulatory Scrutiny

Microsoft and Apple, two of OpenAI’s top partners, the creators of ChatGPT, will not have advisory roles on the company’s board, as U.S. and European governments scrutinize the influence big tech companies have on leading AI startups.

Microsoft, which has invested billions of dollars in OpenAI, was given a non-voting seat on the company’s board after a turmoil last year that saw CEO Sam Altman fired and then reinstated days later. As Bloomberg News previously reported, Apple was also expected to take on a role on the advisory board after striking a deal last month to integrate ChatGPT into its products, but such a plan will not be realized. OpenAI confirmed that there will be no advisory positions on its board.

A Microsoft spokesman confirmed the company would resign its board seat. An Apple spokesman did not respond to a request for comment. The Financial Times first reported the withdrawals.

In the absence of formal board roles for its top partners, OpenAI will hold regular meetings for major investors and partners. They will be open to Apple and Microsoft, OpenAI spokeswoman Kayla Wood said in an email. “We look forward to continuing to receive feedback and advice from these key stakeholders.”

The rise of OpenAI and other AI startups like Anthropic, fueled by interest in ChatGPT and other chatbots, has shaken up the tech industry in the past year, with analysts and tech leaders suggesting the upstarts could take some of the power from dominant players like Microsoft.

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But OpenAI and other leading AI startups have become dependent on investment from major tech companies because of the enormous costs of developing cutting-edge AI. The algorithms behind systems like ChatGPT are trained on expensive, power-hungry computer hardware.

Microsoft invested billions in OpenAI in early 2023, and Anthropic took funding from Google and Amazon last year. But those deals have drawn scrutiny from regulators. (Amazon founder Jeff Bezos owns The Washington Post.)

In January, the Federal Trade Commission said it would investigate whether investments and partnerships between AI companies and Big Tech are stifling real competition. “Our investigation will shed light on whether investments and partnerships by dominant companies risk distorting innovation and undermining fair competition,” FTC Chairwoman Lina Khan said in a statement.

Last month, Khan’s agency reached an agreement with the Justice Department that forms the basis for the FTC to launch an investigation into the Microsoft-OpenAI partnership.

Microsoft is unlikely to relinquish its formal role on OpenAI’s board, according to an agency official who spoke on condition of anonymity to discuss a private matter. The official said the move suggests the companies recognize their deal could raise “serious” antitrust issues.

OpenAI is hiring lawyers and lobbyists at a rapid pace as the company grows and faces increasing legal and regulatory pressure. The company is facing a growing number of lawsuits from news organizations, authors and other content creators who claim the company used their copyrighted work to train its AI algorithms without payment or permission.

Despite its prominence, OpenAI’s business is still in its infancy and needs to find many new customers if it is to turn a profit. Forming alliances with Big Tech could help AI startups gain access to billions of paying customers around the world, an easier path than developing new products from scratch.

OpenAI and Apple have portrayed their latest deal as mutually beneficial: Apple will enhance the iPhone by providing access to ChatGPT, and OpenAI will make its technology available to users of Apple phones and computers.

Microsoft’s advisory role on OpenAI’s board was announced after a dramatic board showdown at the AI company in November. A majority of the company’s previous board voted to fire Altman, sparking outrage and shock in the tech world and threats to resign from most of the company’s employees. Altman was reinstated days later in a deal that saw nearly all of the board members step down.