Microsoft has relinquished its observer seat on the OpenAI board, a position that had been under regulatory scrutiny in both Europe and the United States. This seat allowed Microsoft to attend board meetings and access confidential information without having voting rights. The decision comes as OpenAI’s governance has significantly improved over the past eight months.
Initially, Microsoft took on the observer role in November 2023, shortly after Sam Altman resumed leadership of OpenAI, which operates the popular generative AI chatbot ChatGPT. Microsoft’s investment in OpenAI exceeds $10 billion, further fueling regulatory concerns about the extent of its influence over the AI start-up.
According to a report by the Financial Times, Apple was also expected to assume an observer role on OpenAI’s board but has decided against it. Apple has not commented on this development.
In a letter dated July 9, Microsoft stated that the progress made by OpenAI’s new board over the past eight months made the observer role redundant. They expressed confidence in the company’s new direction, citing OpenAI’s new partnerships, innovation, and growing customer base as indicators of its improved governance.
Despite the European Union’s antitrust regulators determining that Microsoft’s partnership with OpenAI does not fall under the bloc’s merger rules, they have sought third-party views on the exclusivity clauses in the agreement. Meanwhile, antitrust watchdogs in Britain and the U.S. remain concerned about Microsoft’s potential control over OpenAI and the latter’s autonomy.
Both Microsoft and OpenAI are intensifying their efforts to sell AI technology to enterprise customers, aiming to generate revenue and showcase their independence to address ongoing antitrust concerns. In addition, Microsoft is broadening its AI offerings on the Azure platform and has recently hired Inflection’s CEO to lead its consumer AI division, a move seen as an effort to diversify beyond its partnership with OpenAI.
