Microsoft quits OpenAI board amid growing scrutiny over AI partnerships

Microsoft has resigned from its seat on Open AI’s board, saying its involvement is no longer needed because the ChatGPT company has improved its governance since experiencing a few days of boardroom chaos last year.

In a letter on Tuesday, Microsoft confirmed that it would resign “effective immediately” from its observer position on the artificial intelligence firm’s board.

“We appreciate the support shown by OpenAI leadership and the OpenAI Board in making this decision,” the letter said.

The surprise exit came amid growing scrutiny from antitrust regulators over the AI ​​powerhouse alliance. Microsoft has reportedly invested $13 billion in OpenAI.

EU regulators indicated last month they would review the tie-up under the 27-nation bloc’s antitrust rules, and British competition authorities are also looking into the deal.

Microsoft took over his board seat after a power struggle in which OpenAI CEO Sam Altman was fired and quickly rehired while the board members who had pushed for his ouster were ousted.

“Over the past eight months, we have seen significant progress from the newly formed board and have confidence in the direction of the company,” Microsoft said in its letter. “Given all of this, we do not believe our limited role as an observer is necessary any longer.”

With Microsoft’s departure, OpenAI will no longer have observer seats on its board.

“We thank Microsoft for expressing confidence in the company’s board and leadership, and we look forward to continuing our successful collaboration,” OpenAI said in a statement.

It’s not hard to connect Microsoft’s decision with growing scrutiny of big tech companies and their ties to artificial intelligence startups, said Alex Haffner, a partner specializing in competition at British law firm Fladgate.

“It is clear that regulators are very focused on the complex web of interrelationships that[Big Tech]has created with AI providers, hence the need for Microsoft and others to carefully consider how they structure those arrangements going forward,” he said.

OpenAI said it would take a new approach to “inform and engage key strategic partners” such as Microsoft and Apple, and investors such as Thrive Capital and Khosla Ventures, with regular meetings to report progress to investors and ensure closer collaboration on security.