Microsoft has decided to relinquish its board observer seat at OpenAI, a position that had recently come under regulatory scrutiny in both the U.S. and Europe. This move comes after notable improvements in OpenAI's governance over the past eight months.
Microsoft's observer role, which started in November 2022, allowed it to attend board meetings and access confidential information without voting rights. However, regulatory bodies were concerned about Microsoft's influence over OpenAI, particularly given its substantial $10 billion investment in the AI startup.
Microsoft cited significant progress by OpenAI’s newly formed board and its growing customer base as reasons for stepping down. The tech giant expressed confidence in OpenAI's current direction, stating that the observer role was no longer necessary.
Regulatory Concerns
European Union antitrust regulators recently indicated that Microsoft's partnership with OpenAI would not trigger the bloc's merger rules but did seek third-party views on the exclusivity clauses. However, British and U.S. regulators continue to express concerns about Microsoft's influence over OpenAI and its independence.
Strategic Moves
To further diversify its AI offerings, Microsoft is expanding its AI capabilities on the Azure platform and has recently hired the CEO of Inflection to lead its consumer AI division. This move underscores Microsoft's efforts to broaden its AI initiatives beyond its partnership with OpenAI.
Future Outlook
Both Microsoft and OpenAI are striving to sell AI technology to enterprise customers, aiming to demonstrate their independence to regulators and alleviate antitrust concerns.
