Tuesday, July 16, 2024
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Under Pressure from Regulators, Microsoft Resigns from its OpenAI board Seat.

As antitrust authorities increase their scrutiny of the artificial intelligence market, Microsoft has reportedly cancelled plans to take up an observer seat on the board of ChatGPT maker OpenAI, according to a letter obtained by AFP on Wednesday.

The $13 billion partnership between Microsoft and OpenAI has sparked questions about Microsoft’s level of control over its smaller partner on both sides of the Atlantic.

Regulators started looking into the relationship following an unsuccessful boardroom coup attempt against OpenAI CEO Sam Altman last year, who Microsoft had backed and briefly employed.

Microsoft originally obtained a seat on the board as a non-voting observer, but it is now giving that position up in the wake of the turmoil in OpenAI. As per the letter, Microsoft has announced its withdrawal “effective immediately”.

Microsoft sent a letter to OpenAI on Tuesday that stated, “Over the past eight months we have witnessed significant progress by the newly formed board and are confident in the company’s direction.”

Our limited observer role is no longer necessary, in our opinion. After a preliminary investigation, the European Commission, the EU’s powerful antitrust regulator, concluded last month that Microsoft’s investment did not imply it had taken control of OpenAI.

However, Microsoft still faced an investigation by British competition authorities regarding its observer seat on the board, and it might face an antitrust investigation in the US.

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