Microsoft and Apple have decided not to sit on OpenAI's board of directors, a decision that comes as regulators increase scrutiny of big tech companies' involvement in AI development and deployment.
Microsoft has formally notified OpenAI of its withdrawal from the board of directors, according to a July 10 Bloomberg report citing anonymous sources. The move comes about a year after the Redmond-based company made a massive $13 billion investment in OpenAI in April 2023.
“Over the past eight months, we have witnessed great progress by the newly formed board and are confident in the direction of the company,” Microsoft said in a memo to OpenAI. The tech giant added that “we no longer believe a limited observer role is necessary.”
Contrary to recent reports that Apple would join OpenAI's board as an observer as part of the groundbreaking agreement announced in June, with Microsoft's departure it appears OpenAI will no longer have a board observer.
In response to these developments, OpenAI expressed its gratitude to Microsoft, stating, “We appreciate Microsoft's confidence in the board and the direction of the company, and we look forward to a continued successful partnership.”
The move by big tech companies to step back from boardroom involvement comes as regulators around the world step up scrutiny of big tech companies amid concerns about their potential influence over AI developments and industry dominance.
In June, European Union regulators announced that OpenAI may face an EU antitrust investigation over its partnership with Microsoft. EU competition chief Margrethe Vestager also revealed plans for local regulators to ask companies like Microsoft, Google, Meta and ByteDance's TikTok for additional third-party opinions and investigations into their AI partnerships.
The decisions of Microsoft and Apple to step down from the OpenAI board of directors could be interpreted as a strategic move to mitigate potential regulatory challenges: by maintaining a more at-arm relationship with AI companies, these tech giants may be seeking to avoid accusations of undue influence or control over AI development.
“We're thrilled to be working with Floodgate,” said Alex Hafner, competition partner at Floodgate.
“We are forced to conclude that Microsoft's decision is heavily influenced by the ongoing competition/antitrust investigation into the influence it (and other large technology companies) has over emerging AI companies such as Open AI.
Microsoft scored a “victory” in this regard when the EU Commission announced at the end of June that it was dropping its merger control investigation into Microsoft and Open AI, which was originally announced when Open AI restructured its board of directors following Sam Altman's on-and-off departure from the company.
“But the Commission has confirmed that it is still considering the competitive impact of the parties' broader arrangements, and it is clear that regulators are placing a very strong focus on the complex web of interactions that big tech companies have built with AI providers, so Microsoft and other companies will need to think carefully about how they structure these arrangements going forward.”
As AI continues to play an increasingly important role in technological advancement and societal change, the balance between innovation, competition, and regulation remains a complex challenge for industry players and policymakers alike.
In the coming months, scrutiny of AI partnerships and investments is likely to continue as regulators around the world grapple with the challenge of ensuring fair competition and responsible AI development.
(Photo: Andrew Neil)
reference: Nvidia: World's most valuable company under attack in France for antitrust violations
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