Microsoft has dropped its observer seat on OpenAI’s board as regulatory scrutiny of their partnership continues.
This decision comes as US and European regulators examine the collaboration between the tech giant and the AI startup behind ChatGPT.
Sources said Microsoft chose to step down from the board to alleviate concerns raised by antitrust officials.
They added that it was also to avoid defending a position Microsoft no longer deemed necessary.
The move coincides with OpenAI’s newly appointed chief financial officer initiating plans to build the company’s first investor relations team.
Another source said this team will regularly update investors on the company’s progress, separate from board meetings.
In a letter to OpenAI, Microsoft said it resigned because it believed OpenAI’s board had stabilized, making Microsoft’s involvement unnecessary.
Microsoft wrote: “Over the past eight months, we have witnessed significant progress by the newly formed board and are confident in the company’s direction.”
OpenAI experienced significant upheaval late last year when CEO Sam Altman was abruptly fired and reinstated.
It led to the formation of a new board.
Microsoft: “Over the past eight months, we have witnessed significant progress by the newly formed board and are confident in the company’s direction”
During this period, Microsoft gained a nonvoting observer position, which provided insights into the board’s transitional work without compromising its independence.
An OpenAI spokeswoman said it is “establishing a new approach to informing and engaging key strategic partners—such as Microsoft and Apple—and investors.”
Previously, Apple was set to have a board observer seat as part of a partnership to integrate ChatGPT into its devices under a broader AI initiative called Apple Intelligence.
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Under the new structure, OpenAI will no longer offer board observer seats to any partner.
OpenAI took the internet by storm in late 2022 with the release of ChatGPT.
It’s followed by Microsoft’s $13 billion investment, granting it a 49 percent stake in OpenAI’s for-profit arm.
This partnership is under antitrust scrutiny in the US and Europe.
The Federal Trade Commission and the UK’s Competition and Markets Authority investigate the investment.
The European Union also examines whether the partnership constitutes a de facto merger.
The EU said Microsoft had not acquired lasting control over OpenAI but pledged to monitor the relationship.
