Apple, Microsoft Abandon OpenAI Board Seats Amid AI Regulatory Scrutiny

Tech giants Apple and Microsoft have decided to forgo their observer seats on the board of OpenAI amid growing global regulatory scrutiny on companies offering artificial intelligence (AI) services.

A photo taken on November 23, 2023 shows the logo of the ChatGPT application developed by US artificial intelligence research organization OpenAI on a laptop screen (R) and the letters AI on a smartphone screen in Frankfurt am Main, western Germany.

Apple Gives Up OpenAI Board Seat

Initially, reports suggested that Apple's Phil Schiller would join OpenAI's board as an observer, a position tied to the recent integration of ChatGPT into Apple's iOS 18.

However, Apple has now decided against this move. Instead, the company will hold regular meetings with OpenAI to discuss collaborative interests.

The Financial Times explains that this observer role would have granted Schiller a non-voting position at OpenAI's board meetings, providing Apple with insights into OpenAI's strategic plans without direct control.

By opting for regular meetings over a formal board position, Apple aims to sidestep any antitrust issues that might arise from having a seat on the board of a prominent AI company.

Microsoft's Also Exits OpenAI Observer Seat

Microsoft, a major investor in OpenAI, has also given up its observer seat on the AI company's board.

This decision was communicated in a letter to OpenAI, stating that the withdrawal was effective immediately. Microsoft's involvement with OpenAI includes a massive $13 billion investment, crucial for OpenAI's access to computing power and cloud storage.

The observer role for Microsoft came into existence after a tumultuous period last year when OpenAI's CEO Sam Altman was abruptly fired by the board, only to be reinstated shortly after. This role allowed Microsoft to stay informed about board activities without compromising its independence.

Keith Dolliver, Microsoft's deputy general counsel, explained in his letter that their position allowed them to gain insights into the board's activities while maintaining its independence.

He noted that since then, they have observed substantial progress from the newly established board and feel confident about the company's trajectory.

Answering to Regulatory Concerns

The decisions by Apple and Microsoft come as antitrust authorities in the European Union and the United States intensify their scrutiny of Big Tech's investments in AI start-ups.

The European Commission has been exploring the possibility of an antitrust investigation into the partnership between Microsoft and OpenAI, while the US Federal Trade Commission and Department of Justice have also begun examining these investments.

In response to these regulatory pressures, OpenAI has adopted a new approach to engaging with its strategic partners. Instead of board seats, the organization will now host regular meetings with key partners, including Microsoft, Apple, Thrive Capital, and Khosla Ventures.

OpenAI's eight-member board continues to include influential figures such as Sam Altman, former US Treasury Secretary Larry Summers, and Instacart CEO Fidji Simo, with Bret Taylor, former co-CEO of Salesforce, serving as chairman.

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