Microsoft, Apple Avoid OpenAI’s Board As US Scrutiny Grows

Posted by Admin July 10, 2024 Tech

(Bloomberg) — Microsoft Corp. and Apple Inc. have relinquished the chance to be observers on OpenAI’s board, a surprise decision that underscores growing scrutiny from antitrust regulators on Big Tech’s influence over artificial intelligence.

The Windows software maker, which has invested $13 billion in the creator of ChatGPT, sent a letter to the startup announcing its withdrawal from the board, according to a person familiar with the matter, asking not to be identified discussing a private move. Apple had been expected to take up a similar role, but an OpenAI spokesperson said the startup will have no board observers after Microsoft’s departure.

Last month, European regulators said they were going to survey Microsoft’s rivals about OpenAI’s exclusive use of its technology. That underscores the mounting pressure on one of the world’s most valuable companies, which hopes to tap OpenAI’s services to propel its Windows and Copilot AI platforms. The US is opening a separate antitrust investigation into Microsoft’s alleged dominance of the rapidly emerging field, Bloomberg News has reported.

“Over the past eight months we have witnessed significant progress from the newly formed board and are confident in the company’s direction,” Microsoft wrote in its memo to OpenAI, reviewed by Bloomberg News. “We no longer believe our limited role as an observer is necessary.”

Microsoft, which also runs the Azure cloud computing service, faces questions about its other investments in the sphere.

The FTC also opened a probe into whether Microsoft failed to properly notify the antitrust agencies about its deal with Inflection AI, according to the people. In March, the Redmond, Washington-based software giant agreed to pay the startup $650 million to license its AI software and hired much of Inflection’s staff.

“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, without commenting directly on Apple or Microsoft’s decisions. The Financial Times reported earlier on Microsoft’s exit.

(Updates with OpenAI’s statement from the fourth paragraph)