Microsoft has announced it will relinquish its observer board seat at OpenAI, despite having invested over $10 billion in the company and extensively integrating OpenAI’s AI models across its product line.
The observer board seat, which did not carry voting rights, was intended for Microsoft to monitor the board’s activities. This seat was secured in November 2023 during a tumultuous period for OpenAI, which included the abrupt dismissal of CEO Sam Altman and a complete board overhaul.
In a letter to OpenAI, Microsoft explained that the decision to give up the seat was due to their confidence in OpenAI’s improved governance since the seat was acquired. “Over the past eight months, we have witnessed significant progress by the newly formed board and are confident in the company’s direction. Given all of this, we no longer believe our limited role as an observer is necessary,” Microsoft stated.
OpenAI responded with appreciation, saying, “We are grateful to Microsoft for voicing confidence in the Board and the direction of the company, and we look forward to continuing our successful partnership.”
Apple had also been expected to join the board, with plans for its App Store chief, Phil Schiller, to take an observer role to gain insights into OpenAI due to their recent partnership. However, these plans appear to have been abandoned.
Instead, OpenAI will organize regular stakeholder meetings to share progress with Microsoft and Apple.
This announcement from Microsoft comes in the wake of a Federal Trade Commission (FTC) investigation into potential antitrust practices concerning Microsoft’s relationship with OpenAI. Additionally, Microsoft recently faced an antitrust violation warning from the European Union related to bundling Teams with Microsoft 365.
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