Microsoft and Apple Give Up OpenAI Board Seats amid Regulatory Concerns

UTC by Bhushan Akolkar · 2 min read
Microsoft and Apple Give Up OpenAI Board Seats amid Regulatory Concerns
Photo: Depositphotos

Microsoft sent a letter to OpenAI announcing its withdrawal from the board. This comes as Microsoft faces regulatory scrutiny on its growing involvement with OpenAI.

In a major move, tech giants Microsoft Corporation and Apple Inc have reportedly decided to relinquish their board seats from the very popular artificial intelligence firm OpenAI citing some regulatory concerns. As reported by Bloomberg earlier today, July 10, Microsoft sent a letter to OpenAI announcing its withdrawal from the board, said an anonymous source familiar with the matter.

Interestingly, this withdrawal from the board seat comes just a year and a half after Microsoft announced its staggering $13 billion investment in OpenAI last year in April 2023. In its memo to OpenAI, the software giant reportedly mentioned:

“Over the past eight months we have witnessed significant progress from the newly formed board and are confident in the company’s direction. We no longer believe our limited role as an observer is necessary.”

Tech giant Apple Inc was reportedly planning to take up a similar role at OpenAI as the board observer. However, following Microsoft’s departure, an OpenAI spokesperson confirmed that the startup will have no further board observers.

“We’re grateful to Microsoft for voicing confidence in the Board and the direction of the company, and we look forward to continuing our successful partnership,” OpenAI said in a statement to Bloomberg News.

OpenAI Faces Growing Regulatory Scrutiny

Last month in June, the European regulators stated that they were going to survey Microsoft’s competitors over OpeanAi’s exclusive use of its technology. This shows that Microsoft is facing growing regulatory pressure while it aims to leverage OpenAI’s services to enhance its Windows and Copilot AI platforms.

On the other hand, the United States is reportedly launching an anti-trust investigation into Microsoft’s alleged dominance in the rapidly evolving field. Microsoft, known for its Azure cloud computing service, is under scrutiny for its broader investments in the sector.

According to sources, the FTC has launched an investigation into whether Microsoft adequately informed antitrust authorities about its agreement with Inflection AI. Earlier this year, Microsoft, headquartered in Redmond, Washington, finalized a $650 million deal to license AI software from Inflection and onboarded a significant portion of the startup’s workforce.

During its recent WWDC conference, Apple also joined hands with OpenAI in order to bring ChatGPT to iPhone and Mac users. Seeing the regulatory pressure on Microsoft, Apple would be willing to avoid the heat for now.

Artificial Intelligence, News, Technology News
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