Microsoft (MSFT) has relinquished its board observer seat at OpenAI, citing significant improvements in the AI start-up's governance over the past eight months. This move comes amidst ongoing regulatory scrutiny on both sides of the Atlantic. Apple, which recently announced plans to integrate OpenAI's ChatGPT into its devices, has also opted not to take up the observer role, contrary to previous expectations. Apple did not comment on the decision.
An OpenAI spokesperson revealed that the company plans to adopt a new engagement strategy by hosting regular stakeholder meetings with strategic partners such as Microsoft and Apple, as well as investors like Thrive Capital and Khosla Ventures. Microsoft had initially taken a non-voting observer position on OpenAI's board in November last year, following CEO Sam Altman's return to the company. This position allowed Microsoft to attend board meetings and access confidential information without voting rights on significant decisions.
Market Overview:
- Microsoft relinquishes OpenAI board observer seat.
- Apple declines to take up observer role.
- OpenAI to host regular stakeholder meetings.
Key Points:
- Microsoft's $10 billion investment in OpenAI raised antitrust concerns.
- EU regulators decide partnership does not fall under merger rules.
- British and U.S. antitrust authorities remain concerned.
Looking Ahead:
- Monitoring regulatory responses in Europe, Britain, and the U.S.
- Expanding AI offerings on Microsoft's Azure platform.
- OpenAI's efforts to demonstrate independence to regulators.
The observer seat and Microsoft's substantial $10 billion investment in OpenAI have raised concerns among antitrust authorities in Europe, Britain, and the U.S. regarding Microsoft's potential control over OpenAI. In a letter dated July 9, Microsoft stated that due to OpenAI's new partnerships, innovations, and expanding customer base, it no longer deemed the observer role necessary. "Over the past eight months, we have witnessed significant progress by the newly formed board and are confident in the company's direction," the letter read.
While EU antitrust regulators have decided that the partnership does not fall under the bloc's merger rules, they continue to seek third-party views on the exclusivity clauses within the agreement. In contrast, British and U.S. antitrust watchdogs remain concerned about Microsoft's influence over OpenAI. Both companies are striving to demonstrate their independence and mitigate regulatory concerns by expanding their AI offerings and competing for enterprise customers. Microsoft is also broadening its AI capabilities on the Azure platform and has appointed Inflection's CEO to lead its consumer AI division, signaling efforts to diversify beyond OpenAI.
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