Microsoft and Apple may be playing the long game by ditching OpenAI board roles

OpenAI CEO Sam Altman with Microsoft CEO Satya Nadella.

Microsoft has given up its observer role on OpenAI’s board, per a letter reported by outlets including Axios.Apple is not expected to take up a similar observer role, The Financial Times reported.The moves may be an attempt to ease regulatory concerns over their influence in the AI sector.

Microsoft and Apple might have made a play to assuage antitrust regulators over their involvement with OpenAI.

Microsoft has now relinquished its role as an observer on OpenAI’s board, while Apple will not take up a similar spot, according to reports by outlets including The Financial Times.

Although Microsoft had no voting rights, its decision may be a bid to ease the concerns of regulators, who have been trying to assess its influence over OpenAI.

Microsoft won an observer role following the brief ousting of Sam Altman as OpenAI’s CEO last November.

But late Tuesday the company said it was not “necessary” to keep its seat after witnessing “significant progress” in the past eight months, according to a letter Microsoft sent to OpenAI seen by outlets including Axios and the Financial Times.

Microsoft also said in the letter that it’s “confident” about OpenAI’s “direction.”

Alex Haffner, a competition partner at law firm Fladgate, told BI: “It is hard not to conclude that Microsoft’s decision has been heavily influenced by the ongoing competition/antitrust scrutiny of its (and other major tech players) influence over emerging AI players such as OpenAI.”

He added: “It is clear that regulators are very much focused on the complex web of interrelationships that Big Tech has created with AI providers, hence the need for Microsoft and others to carefully consider how they structure these arrangements going forward.”

Microsoft has invested billions in the ChatGPT maker and gets nearly half of OpenAI’s profits as part of the partnership deal. OpenAI still relies on Microsoft’s cloud services for the computing power needed to train and run its large language models (LLMs).

New approach

The partnership has been considered to have given Microsoft a leg up in the AI race, as OpenAI’s models power its AI features such as Copilot.

An OpenAI representative told BI that its new CFO, Sarah Friar, was taking a new approach to engaging with partners such as Microsoft and Apple, and investors including Thrive Capital and Khosla Ventures.

“Moving forward, we will host regular stakeholder meetings to share progress on our mission and ensure stronger collaboration across safety and security,” they said.

Apple is set to follow Microsoft’s lead, retreating from its plan to take on a similar board observer role, the FT reported. Bloomberg previously reported that Apple had secured an observer seat.

Antitrust scrutiny

This came after Apple announced it struck a partnership with OpenAI at its Worldwide Developers Conference (WWDC) in June, integrating ChatGPT into its devices including the iPhone as part of a broader AI push.

The pullback underscores the mounting antitrust scrutiny of Big Tech’s grip on AI. Regulators in both the US and UK have raised concerns about potential market control through strategic partnerships.

Microsoft and OpenAI are both facing regulatory scrutiny from the Federal Trade Commission and the UK’s Competition and Markets Authority. European regulators have also been assessing the partnership.

It remains to be seen whether Microsoft and Apple’s moves will placate those concerns about their involvement with OpenAI.

Read the original article on Business Insider

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