Microsoft has decided to relinquish its board observer seat at OpenAI, citing the significant improvement in the AI start-up's governance over the past eight months. The move comes after OpenAI CEO Sam Altman reassumed control of the company, which is known for its generative AI chatbot ChatGPT.
The observer seat granted Microsoft the ability to attend OpenAI's board meetings and access confidential information without having any voting rights on key matters such as electing directors. This arrangement, coupled with Microsoft's substantial investment of over $10 billion in OpenAI, had raised concerns among antitrust watchdogs in Europe, Britain, and the US regarding the level of control exerted by Microsoft over OpenAI.
Microsoft highlighted OpenAI's recent partnerships, innovation, and expanding customer base under Altman's leadership as the reasons for giving up its observer seat. In a letter dated July 9, Microsoft expressed confidence in the direction of the company and stated that its limited role as an observer was no longer deemed necessary.
While EU antitrust regulators determined that Microsoft does not control OpenAI and thus the partnership is not subject to merger rules, British and US antitrust authorities remain wary of Microsoft's influence over OpenAI and its impact on the latter's independence.
Both Microsoft and OpenAI are actively vying to sell AI technology to enterprise customers, aiming to drive revenue and demonstrate autonomy to regulators in response to antitrust concerns. Microsoft's recent expansion of AI offerings on the Azure platform, along with the appointment of a new CEO for its consumer AI division, is seen as a strategic move to diversify beyond its involvement with OpenAI.
