Microsoft and Apple Drop OpenAI Board Seats to Avoid Regulatory Scrutiny

Microsoft has ditched its observer seat on the OpenAI board as the company is facing regulatory scrutiny over its investments in the ChatGPT maker and other AI startups. Apple, which was also expected to get an observer role on the OpenAI board for veteran Phil Schiller has ultimately declined this opportunity, according to a new report from the Financial Times.

In a letter sent to OpenAI yesterday and seen by Axios, Microsoft justified its decision to give up its observer seat on OpenAI’s board by the fact that it was no longer necessary. Dee Templeton, a vice president for technology and research partnerships and operations at Microsoft joined OpenAI’s reconstituted board earlier this year after the previous board had fired and then rehired OpenAI CEO Sam Altman.

“As you know, we accepted the non-voting board observer role at a time when OpenAI was in the process of rebuilding its board,” Microsoft said in the letter. “This position provided insights into the board’s activities without compromising its independence, and we appreciated the opportunity to serve as an observer during this period of change. Over the past eight months we have witnessed significant progress from the newly formed board and are confident in the company’s direction.”

In a statement shared with The Verge, OpenAI spokesperson Steve Sharpe explained how the company plans to keep its biggest partners and investors involved in its strategic decisions going forward. This will happen through “regular stakeholder meetings to share progress on our mission and ensure stronger collaboration across safety and security.”

In recent years, Microsoft invested over $10 billion into OpenAI, which is now using the Microsoft Azure cloud to develop and run its AI models at a global scale. Microsoft also obtained an exclusive license on OpenAI’s GPT-4 models, and the company’s close relationship with the ChatGPT makers led regulators in the US, the UK, and the EU to investigate.

Apple’s situation is quite different as it’s a latecomer to the generative AI race. Apple will reportedly not pay OpenAI any money for integrating ChatGPT into Apple Intelligence later this year, and the company said that it’s looking to integrate more third-party AI models into its personal intelligence system. Anyway, the company getting an observer role on OpenAI’s board would have cemented the company’s partnership with OpenAI, but the FT now says it’s no longer happening, citing one person with direct knowledge of the situation.