KEY FACT: Microsoft has relinquished its seat on OpenAI’s board and Apple will no longer assume an equivalent role. The unexpected move from the tech giants is traceable to the increasing scrutiny from regulators over their investments in artificial intelligence.

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Microsoft and Apple Quit OpenAI Board Membership

Technology giants, Microsoft and Apple have reportedly relinquished their seat on OpenAI’s board. According to news reports Wednesday, the unexpected move from the tech giants came amid increasing scrutiny from regulators over their investments in artificial intelligence. The tech giants have been reportedly jostling for AI supremacy.

According to Bloomberg's July 10 report, Microsoft sent a letter to OpenAI announcing its withdrawal from the board. This withdrawal comes a year after the Windows software maker made a massive $13 billion investment in OpenAI in April 2023. Consequently,

Microsoft's memo to OpenAI revealed that OpenAI will have no board observers after Microsoft’s departure.

“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.”

In response, OpenAI expressed confidence in the composition of its board and its firm resolve to continue pursuing the company's vision despite Microsoft's withdrawal.

“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,”

Popular opinion captures that that Apple would also get an observer role on OpenAI’s board as part of a landmark agreement announced in June, however, OpenAI mentioned that it will have no board observers after Microsoft’s departure.

There are concerns about the potential impact of Big Tech on AI. In June, European Union regulators announced that OpenAI could face an EU antitrust investigation over its partnership with Microsoft.

An EU competition chief Margrethe Vestager has responded that local regulators will seek additional third-party views and will survey firms like Microsoft, Google, Meta, and ByteDance’s TikTok about their AI partnerships.

On the contrary, Alex Haffner, competition partner at U.K. law firm Fladgate, posits that Microsoft’s decision is not influenced by the ongoing AI scrutiny.

“It is hard not to conclude that Microsoft’s decision has been heavily influenced by the ongoing competition/antitrust scrutiny of its (and other major tech players) influence over emerging AI players such as Open AI,”

This development will unveil some interesting times in the Big tech and AI space. Let's watch out.

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