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Microsoft removed its board observer seat at OpenAI, which has faced regulatory scrutiny on both sides of the Atlantic, after the AI startup’s governance improved dramatically in the past eight months.
After OpenAI CEO Sam Altman returned to the firm, which operates the generative AI chatbot ChatGPT, Microsoft joined the board as a non-voting observer in November 2018.
The seat allowed it to attend OpenAI board meetings and access secret information but not vote in director elections.
Antitrust watchdogs in Europe, Britain, and the US are concerned about Microsoft’s control on OpenAI due to its observer seat and $10 billion investment.
OpenAI’s new alliances, creativity, and rising client base since Altman’s return to the business prompted Microsoft to leave its observer role.
“Over the past eight months, the newly formed board has made significant progress and we are confident in the company’s direction. Given this, we no longer believe our restricted position as an observer is required, as it wrote to OpenAI on July 9.
20 May 2024, Redmond, USA: Software company headquarters have the Microsoft logo.
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Last month, EU antitrust regulators denied the partnership merger status since Microsoft does not control OpenAI, but they will seek third-party opinions on the exclusivity provisions.
However, British and US antitrust watchdogs remain concerned about Microsoft’s influence over OpenAI and its independence.
Microsoft and OpenAI are competing to sell AI technology to enterprises to earn cash and show regulators their independence to solve antitrust concerns.
Microsoft is also extending its Azure AI capabilities and hiring Inflection’s CEO to lead its consumer AI group, a move seen as a diversification beyond OpenAI.
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