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Microsoft took a non-voting, observer position on OpenAI’s board last November after OpenAI CEO Sam Altman returned to lead the company. Apple too were expected to take an observing seat after they announced last month that it would integrate ChatGPT into iPhones read more
 "Microsoft, Apple give up OpenAI board seat, back out of observer status to avoid EU scrutiny")
Citing OpenAI's new partnerships, innovations, and growing customer base since Altman's return, Microsoft explained that they no longer saw the need for their limited observer role. Image Credit: AFP
Microsoft and Apple have decided to step back from their observer roles on OpenAI’s board to avoid regulatory scrutiny, particularly from the European Union. This decision came after OpenAI improved its governance significantly over the past eight months, making the observer roles deemed unnecessary.
Apple, which had announced last month that it would integrate OpenAI’s ChatGPT into its devices, has also decided not to take up an observer role on OpenAI’s board, despite earlier expectations.
This was reported by the Financial Times, citing a source with direct knowledge of the situation.
In a statement, OpenAI’s spokesperson stated that the AI company will now focus on engaging with Microsoft and Apple which are its strategic partners, and with investors like Thrive Capital and Khosla Ventures, by conducting regular stakeholder meetings. This new approach aims to keep these partners informed and involved without the need for board observer seats.
Microsoft had taken a non-voting, observer position on OpenAI’s board in November last year after OpenAI CEO Sam Altman returned to lead the company.
This position allowed Microsoft to attend board meetings and access confidential information, but it did not grant any voting rights. Microsoft’s substantial investment of over $10 billion in OpenAI had raised concerns among antitrust authorities in Europe, the UK, and the US regarding the extent of control Microsoft had over OpenAI.
Citing OpenAI’s new partnerships, innovations, and growing customer base since Altman’s return, Microsoft explained that they no longer saw the need for their limited observer role. In a letter to OpenAI dated July 9, Microsoft expressed confidence in the direction of OpenAI’s newly formed board, stating that their observer role was no longer necessary.
While the EU antitrust regulators decided that the partnership did not fall under the bloc’s merger rules because Microsoft does not control OpenAI, they still sought third-party views on the exclusivity clauses in the agreement.
Microsoft believed that the observer role was causing concerns among competition regulators, with the UK’s Competition and Markets Authority and the US Federal Trade Commission both reviewing the partnership’s implications.
OpenAI, based in San Francisco, is now setting up a new strategy to keep its key strategic partners informed and engaged. This includes hosting regular stakeholder meetings to discuss progress and ensure collaboration on safety and security issues. This new approach means that OpenAI will no longer have board observers, which also rules out Apple’s potential observer role.
Several reports have also suggested that Apple was considering placing Phil Schiller, the head of its app store, on OpenAI’s board as part of its AI agreement.
Despite these changes, antitrust watchdogs in the UK and US continue to have concerns about Microsoft’s influence over OpenAI and the startup’s independence. Both companies compete to sell AI technology to enterprise customers, striving to generate revenue and demonstrate their independence to address antitrust concerns.
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English (US) ·