LAGOS – In a strategic move, Microsoft (MSFT.O) has relinquished its observer seat on OpenAI’s board, a position that has attracted regulatory scrutiny in both Europe and the United States. This decision comes after significant improvements in the AI startup’s governance over the past eight months, according to Microsoft’s statement.
Apple (AAPL.O), which recently announced plans to integrate OpenAI’s chatbot, ChatGPT, into its devices, was widely anticipated to assume the observer role. However, the Financial Times reported, citing a source with direct knowledge, that Apple has opted not to take up the position. Apple has yet to respond to requests for comment on this development.
An OpenAI spokesperson revealed that the company is shifting its approach by organizing regular stakeholder meetings with key strategic partners such as Microsoft and Apple, along with investors including Thrive Capital and Khosla Ventures. This new engagement strategy aims to foster closer collaboration without the need for board observer roles.
Microsoft’s observer position, established last November, allowed it to attend OpenAI’s board meetings and access confidential information without voting rights. This arrangement followed the return of OpenAI CEO Sam Altman to lead the company, known for its generative AI chatbot, ChatGPT.
The relinquishment of the observer seat is part of Microsoft’s broader effort to address regulatory concerns regarding its influence over OpenAI. Despite its significant investment of over $10 billion in the AI startup, Microsoft emphasized that OpenAI’s enhanced partnerships, innovation, and growing customer base justified the move.
In a letter to OpenAI dated July 9, Microsoft stated, “Over the past eight months, we have witnessed significant progress by the newly formed board and are confident in the company’s direction. Given all of this, we no longer believe our limited role as an observer is necessary.”
Last month, EU antitrust regulators determined that the partnership between Microsoft and OpenAI would not fall under the bloc’s merger rules, as Microsoft does not control OpenAI. However, they plan to seek third-party opinions on the exclusivity clauses in their agreement. Meanwhile, antitrust authorities in Britain and the U.S. continue to express concerns about Microsoft’s influence over OpenAI and the startup’s independence.
As competition in the AI market intensifies, both Microsoft and OpenAI are striving to demonstrate their independence to regulators. Microsoft is expanding its AI offerings on its Azure platform and has recently appointed the CEO of Inflection to lead its consumer AI division, a move seen as an effort to diversify beyond OpenAI and bolster its AI technology portfolio for enterprise customers.