Microsoft, Apple give up observer seats on OpenAI board amid regulatory scrutiny

Microsoft Corp. and Apple Inc. have opted not to serve on OpenAI’s board amid regulatory scrutiny facing ChatGPT’s creator, Financial Times reported Today.

Microsoft, OpenAI’s largest investor, was given an observer seat on the board last November. The software and cloud computing giant reportedly resigned from that role on Tuesday. Apple, for its part, was also expected to become a board observer but has reportedly changed course.

The development comes at a time when OpenAI is under scrutiny from antitrust regulators in both the US and the European Union. The AI ​​vendor’s partnership with Microsoft is reportedly particularly significant. Microsoft has provided OpenAI with around $13 billion in funding and cloud infrastructure in exchange for a share of profits, as well as the possibility of a future 49% stake.

In early June, the Wall Street Journal reported that the Federal Trade Commission is investigating the companies’ partnership. The FTC is reportedly concerned that Microsoft may have structured the deal to gain control of OpenAI without drawing the attention of regulators. Later that month, the European Union’s top antitrust official revealed that the bloc could launch an investigation into the companies over “certain exclusivity clauses” in their partnership agreements.

Microsoft took an observer seat on OpenAI’s board last December after the brief ouster of CEO Sam Altman. With Altman back in the top job, the executives who voted to fire him have left the company, and the board has been restructured. Microsoft supposedly played a key role in Altman’s reinstatement.

Keith Dolliver, Microsoft’s deputy general counsel, informed OpenAI of the company’s plans to leave the board in a letter sent late Tuesday. “We have seen significant progress from our newly formed board over the past eight months and are confident in the direction the company is headed,” the executive wrote. “Given all of this, we no longer believe our limited observer role is necessary.”

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

About a week before Microsoft’s letter, Bloomberg sources cited say Apple plans to take an observer seat on OpenAI’s board. The iPhone maker reportedly received the position as part of a partnership it announced with the AI ​​creator in June. The iPhone maker no longer plans to join the board, according to the Financial Times.

Apple’s partnership with OpenAI will enable ChatGPT to power part of Apple Intelligence, an upcoming suite of AI features for iPhones and Macs. Some of the features powered by ChatGPT are set to become available in the iPhone maker’s document and image editing tools. Others will be integrated with Siri to enhance the AI ​​assistant’s ability to answer user questions.

Image: OpenAI