Microsoft, OpenAI's main financial backer, drops its board observer position

Microsoft has poured at least $13 billion in OpenAI investment since 2019.

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Key notes

  • Microsoft withdrew from OpenAI’s board amidst regulatory scrutiny and leadership changes, with the company investing $13 billion since 2019.
  • Apple, expected to take on the role, also withdrew. No comments have been made.
  • US and EU regulators are investigating Microsoft’s stake in OpenAI for potential antitrust issues in the AI sector.

Microsoft has reportedly quit its observer seat on the OpenAI board. The decision happened just eight months after holding the position.

The Verge has learned about the decision, following similar reports from Financial Times. Apple, which was also set to join Microsoft, also withdrew “amid growing scrutiny by global regulators of Big Tech’s investments in AI start-ups.”

The Redmond tech giant has been the number-one financial supporter of OpenAI for quite some time, pouring a total of $13 billion in investment into the ChatGPT maker since 2019.

The report mentions that Microsoft withdrew due to its lack of confidence in the company’s new direction after past leadership turmoil, which saw CEO Sam Altman being fired and internal chaos that followed. Apple also opted out.

Instead, OpenAI will engage partners like Microsoft and Apple through regular meetings.

Last year, the US Federal Trade Commission (FTC) started digging into Microsoft’s investment in the AI company. The antitrust regulator’s probe focuses on data privacy and potential antitrust law violations, followed by a similar suit by the UK’s Competitions and Market Authority (CMA).

The European Commission is investigating whether Microsoft’s investment in OpenAI complies with EU merger regulations. They are concerned that Microsoft’s extensive integration of OpenAI’s technology could lead to unfair competition and harm consumers within the European Single Market.

Being OpenAI’s biggest investor, regulators are concerned that Microsoft’s position could put the Redmond company in an unfair position amid the ongoing AI race.

The ChatGPT maker is undoubtedly the hottest AI company at the moment thanks to the revolutionary chatbot and its latest models, which also powers Copilot, Microsoft’s AI offering in Windows operating systems.