Amid regulator scrutiny over big tech companies’ relationships with artificial intelligence startups, Microsoft is stepping down from its observer role on OpenAI’s board, and Apple will no longer appoint executives to similar positions.
Microsoft, the primary funder of ChatGPT developer, announced its resignation in a letter to the startup, as reported by the Financial Times. The company stated that the resignation, as a mere observer with no voting rights on board decisions, is effective immediately.
Microsoft highlighted the progress made by the new OpenAI board post the eventful departure and reinstatement of CEO Sam Altman last year. The company mentioned that OpenAI is heading in the right direction by emphasizing safety and nurturing a positive work culture.
“Considering these developments, we feel that our limited observer role is no longer essential,” stated Microsoft, which has invested $13 billion (£10.2 billion) in OpenAI.
However, Microsoft reportedly believed that its observer role raised concerns among competition regulators. The UK’s Competition and Markets Authority is reviewing whether the deal equated to an “acquisition of control,” while the US Federal Trade Commission is also investigating View Partnerships.
While the European Commission opted out of a formal merger review regarding Microsoft’s investment in OpenAI, it is examining exclusivity clauses in the contract between the two entities.
An OpenAI spokesperson mentioned that the startup is adopting a new strategy to engage key partners like Microsoft, Apple, and other investors on a regular basis to strengthen alignment on safety and security.
As part of this new approach, OpenAI will no longer have an observer on the board, meaning Apple will also not have a similar role. Reports had surfaced earlier this month about Apple intending to include App Store head Phil Schiller on its board, but no comment has been received from Apple.
Regulatory scrutiny has intensified on investments in AI startups. The FTC is investigating OpenAI and Microsoft, along with Anthropic, the creator of the Claude chatbot, and their collaborations with tech giants Google and Amazon. In the UK, the CMA is looking into Amazon’s partnership with Anthropic, as well as Microsoft’s ties with Mistral and Inflection AI.
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Alex Hafner, a partner at British law firm Fladgate, indicated that Microsoft’s decision seemed to be impacted by the regulatory landscape.
“It’s evident that regulators are closely monitoring the intricate relationships between big tech firms and AI providers, prompting Microsoft and others to rethink how they structure these arrangements in the future,” he commented.
Source: www.theguardian.com
