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Microsoft and Apple decline OpenAI board seats amid regulatory scrutiny

Written by Thu 11 Jul 2024

Image Credit: Reuters

Tech giants Microsoft and Apple no longer want to sit on the board of directors as observers for OpenAI due to growing regulatory concerns.

Microsoft has invested more than £7.7 billion ($10 billion) in OpenAI and held a non-voting seat on the OpenAI board since November 2023. Apple, which was offered an observer seat recently, declined the seat. Now, stakeholder meetings will take place, instead of board seats, for investors, and partners.

Antitrust concerns have been growing around the relationship between Microsoft and OpenAI across the world. In the UK, regulators began asking for views on this partnership last December, with EU regulators also investigating this relationship. In the US, the FTC is looking into investments from Microsoft, Amazon and Google into OpenAI and Anthropic.

OpenAI have faced a number of challenges in recent years, with the high profile removal of CEO Sam Altman and his subsequent return raising some governance concerns.

Publishers and news organisations have also filed lawsuits against OpenAI that claim the firm have illegally taken from copyrighted articles. Issues around potential GDPR compliance were raised by the European Center for Digital Rights, who claim OpenAI have breached GDPR rules.

Thanks to the major investment from Microsoft into OpenAI, Microsoft became the exclusive cloud partner for OpenAI, promoting competition concerns. In an increasingly competitive AI marketplace, this deal gave Microsoft a boost and saw OpenAI’s models feed Microsoft’s Bing search engine, Copilot and other products and services.

Spokesperson for OpenAI, Steve Sharpe, said the company was grateful to Microsoft for voicing confidence in the Board and the direction of the company, and it looks forward to continuing its successful partnership.

“Under the leadership of CFO Sarah Friar, we are establishing a new approach to informing and engaging key strategic partners, such as Microsoft and Apple, and investors, such as Thrive Capital and Khosla Ventures,” added Friar.

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Written by Thu 11 Jul 2024

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