Microsoft and Apple resign from OpenAI board seats

Two major technology companies, Apple and Microsoft, have withdrawn their involvement in the OpenAI board.

The Financial Times reported that Microsoft has resigned from its observer seat on OpenAI’s board. Meanwhile, Apple reportedly will not take a similar position on the board.

Microsoft has held an observer position on OpenAI’s board since the company made its dissatisfaction clear with the nonprofit’s previous board, which unexpectedly fired CEO Sam Altman in November 2023.

Observer positions

Days later, under intense pressure from Microsoft, OpenAI rehired Sam Altman after Microsoft CEO Satya Nadella called for a “change” in OpenAI’s management.

When Sam Altman was reinstated as CEO, a new board of directors was also appointed, with Microsoft taking a seat as an observer due to the fact that Redmond is by far OpenAI’s largest investor (up to $13 billion).

OpenAI is also heavily dependent on Microsoft’s Azure cloud infrastructure due to its expensive computing infrastructure.

Meanwhile, last week it emerged that Phil Schiller, the former marketing chief of the iPhone maker and his colleague at Apple, is to be given an observer role on OpenAI’s board.

Schiller’s appointment follows Apple’s announcement at its annual WWDC developer conference that it will bring OpenAI’s ChatGPT chatbot to its devices this year, including iPads, iPhones, Vision Pro headsets, and Macs.

Withdrawal of the board

However, the Financial Times has now reported that Microsoft has resigned from its observer position on OpenAI’s board, and Apple has no intention of taking a similar position.

Microsoft reportedly wrote in a letter to OpenAI that her withdrawal from the board would be effective “immediately.”

Apple was expected to take an observer role on OpenAI’s board as part of a deal to integrate ChatGPT with the iPhone maker’s devices, according to the FT. However, the company has decided against it, according to a person with direct knowledge of the matter.

According to the FT, Apple declined to comment on the matter.

Instead, OpenAI will hold regular meetings with partners like Microsoft and Apple, and investors Thrive Capital and Khosla Ventures, as part of a “new approach to briefing and engaging key strategic partners” under the leadership of Sarah Friar, the former Nextdoor executive who was hired as its first CFO last month, an OpenAI spokesperson said.

Regulatory pressure

Microsoft’s decision to withdraw from oversight of OpenAI’s board of directors comes as antitrust regulators in the EU and US are investigating the partnership between Microsoft and OpenAI amid broader competition concerns in the rapidly evolving artificial intelligence sector.

“This position provided insight into the board’s activities without compromising its independence,” Microsoft deputy general counsel Keith Dolliver wrote in a letter to OpenAI late Tuesday, according to the AP.

Since then, “we’ve seen significant progress from the newly formed board and are confident in the direction the company is headed,” so Microsoft’s role on the board was no longer “necessary,” the sources said.

As Dolliver wrote, OpenAI remains one of Microsoft’s “most valued partners.”

Microsoft does not have a conventional equity stake in OpenAI. Instead, it is entitled to a share of the profits from the OpenAI subsidiary, up to a certain limit.

An OpenAI spokesperson reportedly said: “We are grateful to Microsoft for expressing their confidence in our management and the direction of the company, and we look forward to continuing our successful partnership.”

OpenAI’s eight-person board of directors includes Altman, Larry Summers, former U.S. Treasury Secretary, and Fidji Simo, CEO of grocery delivery company Instacart.

The group is led by Bret Taylor, former co-CEO of Salesforce.