Microsoft and Apple have withdrawn from their observer seats on OpenAI’s board of directors in response to global regulatory concerns about the relationships between big tech companies and influential AI startups.
Microsoft, which has invested $13 billion in OpenAI, has informed the ChatGPT maker that it is resigning “effective immediately” after less than nine months in the role. Apple, which recently announced a partnership with OpenAI to integrate its chatbots into its products, will not be moving forward with its planned board seat, according to the Financial Times.
The world’s leading AI companies, including OpenAI, Anthropic, and Mistral, maintain close relationships with the tech giants that have funded them with billions of dollars. Regulators fear that these alliances will strengthen Silicon Valley’s dominance of AI technology, stifle competition, and enhance its power and influence.
Last December, the UK Competition and Markets Authority expressed concerns, describing the development of AI as “unparalleled in the history of the economy,” and stressing that competition between developers is crucial to “steering the market towards positive outcomes for individuals and businesses.”
The Competition and Markets Authority is currently examining whether Microsoft’s partnership with OpenAI can be classified as a merger, similar to Amazon’s partnership with Anthropic. The authority has invited public comment ahead of a potential preliminary investigation.
The regulator is examining “the multi-year, multibillion-dollar investments, technology development collaborations, and exclusive provision of cloud computing services by Microsoft to OpenAI” to determine whether Microsoft exerts material influence over the business. By giving up its board seat, Microsoft aims to address one of the key regulatory concerns surrounding its investments.
The European Commission also reviewed the deal, concluding that the observer seat did not change OpenAI’s independence or Microsoft’s influence over OpenAI, though it is still considering an antitrust investigation.
In the United States, the Federal Trade Commission is examining the competitive implications of investments and partnerships between big tech companies and AI startups.
OpenAI experienced major turmoil in November of last year when CEO Sam Altman was fired and reappointed over the weekend amid a dispute over the company’s strategic direction. In the wake of the turmoil, Microsoft took on an observer role on the board. Given its significant investment, many were surprised that Microsoft didn’t already have a seat on the board.
In a letter, Microsoft said: “We accepted the role of non-voting observer on the board at a time when OpenAI was in the process of rebuilding its board. This role provided insight into the board’s transitional work without compromising its independence.” With a new board now in place, Microsoft expressed confidence in the company’s direction and concluded that its “limited observer role is no longer necessary.”
“It is hard not to conclude that Microsoft’s decision was heavily influenced by ongoing competition scrutiny around its influence (and that of other big tech companies) over AI startups like OpenAI,” commented Alex Hafner, competition partner at Fladgate. “Regulators are clearly paying close attention to the complex web of interconnected relationships that big tech companies have with AI providers, and Microsoft and others need to carefully consider how these arrangements are structured.”