Microsoft has relinquished its seat as an observer on the board of directors of OpenAI, a leading startup in the field of artificial intelligence, in light of increasing scrutiny by global regulators of major technology companies’ investments in emerging artificial intelligence companies.
Microsoft, which has invested $13 billion in the maker of AI-powered chatbot ChatGPT, said in a letter to OpenAI that its withdrawal from its board role would be “effective immediately.”
Apple was also expected to serve as an observer on OpenAI's board as part of a deal to integrate ChatGPT into iPhones, but it will not do so, the Financial Times reported, citing sources.
According to the report seen by Sky News Arabia, OpenAI announced, through a spokesperson, the implementation of “a new approach to informing and engaging key strategic partners” led by Sarah Friar, the company’s new chief financial officer who was appointed last month. This new approach will include hosting regular meetings with partners such as Microsoft and Apple and investors such as Thrive Capital and Khoshla Ventures.
The move also comes as antitrust authorities in the European Union and the United States are examining the partnership between Microsoft and OpenAI as part of broader concerns about competition in this fast-growing sector.
After the chaos that engulfed OpenAI last year, during which CEO Sam Altman was abruptly fired by the board and then reinstated just a few days later, Microsoft accepted a non-voting role on the board. A failed boardroom coup threatened the value of OpenAI, and thus Microsoft's multibillion-dollar investment in the company.
In a letter to OpenAI on Tuesday evening, Keith Dolliver, Microsoft's deputy general counsel, said: “This position as 'board observer' provided insight into the board's activities without compromising its independence.”
He added: “Since then, we have seen significant progress from the new board and are confident in the direction of the company.” Therefore, Microsoft's role on the Board of Directors is no longer "essential." Dolliver also emphasized that OpenAI remains one of Microsoft's "most valuable partners."
The importance of partnership:
Microsoft's partnership with OpenAI has been crucial to the latter's success.
OpenAI relied on billions of dollars worth of computing and cloud storage resources provided by Microsoft.
The investment in OpenAI has pushed Microsoft to the forefront of generative AI.
Concerns about monopoly:
Microsoft does not have a traditional ownership stake in OpenAI, but it does have a right to a portion of the profits of one of its subsidiaries.
Microsoft and OpenAI have downplayed their relationship as monopoly concerns mount.
The European Commission is considering the possibility of an antitrust investigation into the partnership, and the US Federal Trade Commission has also begun scrutinizing investments made by big tech companies in generative AI companies, including Microsoft, Amazon and Google.
An OpenAI spokesperson comments on Microsoft's withdrawal
An OpenAI spokesperson expressed his gratitude to Microsoft for its confidence in the Board of Directors and the direction of the company, and emphasized that he looks forward to continuing their successful partnership.
OpenAI's eight-member board includes Sam Altman, the company's CEO, as well as Larry Summers, former US Treasury Secretary, and Fiji Simo, CEO of grocery delivery company Instacart. The board is chaired by Brett Taylor, former co-CEO of Salesforce and co-founder of AI startup Sierra.
Comments