As we all know, Microsoft has invested heavily in OpenAI. Not only that but the company has an observer seat on OpenAI’s non-profit board. Well, according to a new report, both Microsoft and Apple are ditching their seats on OpenAI’s board amid regulatory scrutiny.
Major governmental bodies have their eyes on large companies to make sure that they’re not squashing competition throughout different industries. If they see instances of monopolization, they’re swift to act.
With the rapid rise in AI companies, regulators are looking into major corporations that invest in them. If a company invests enough in a startup, then there’s a possibility that the startup could gain an unfair advantage over other others. It can become fuel for an antitrust lawsuit if it’s pushed too far.
Microsoft and Apple give up their seats on OpenAI’s board amid regulatory scrutiny
OpenAI has been pretty fortunate over the past couple of years. It’s gotten some major investments in the past, and that includes a scale-tipping $13 billion from Microsoft. This investment put both companies under regulators’ radar. Also, the fact that Microsoft gained an observer seat on OpenAI’s board didn’t help the situation. This came as a result of the massive coup that happened at OpenAI late last year.
Fast-forward to more recent events, Apple announced that it integrated GPT-4o into iOS 18. Along with that, the company was looking to gain a seat on that very board. It makes sense that Apple would want a fly on the wall during OpenAI’s meetings, as the company is very precious about what goes into its operating system.
However, both companies had to change up their plans because of pressure from global regulators. Microsoft has given up its observer seat on the board and Apple is no longer considering joining. This information comes from people close to the matter.
While Microsoft and Apple aren’t in the group, they’ll still be in the loop. According to an OpenAI spokesperson, the company will hold regular board meetings with Microsoft and Apple in order to keep them wise about what’s going on within OpenAI. Along with that, the company will also include its investors Thrive Capital and Khosla Ventures.
Keeping out of trouble
The last thing that Microsoft needs right now is another antitrust lawsuit. It’s already in the middle of a case involving Microsoft Teams in Europe. Not only that, but a lawsuit could jeopardize the AI keeping Copilot afloat. OpenAI is the lifeblood of Microsoft’s AI venture.
Leaving the board wasn’t an act of paranoia, as the EU stated that it was looking into an antitrust lawsuit back in June. Cases like these tend to take quite a while to materialize, so we don’t expect to hear anything about that for a few more months. At this point, we don’t know if Microsoft leaving the board will extinguish this flame before it flares, but it won’t hurt.
It makes sense that regulators are looking into OpenAI’s board because Microsoft and Apple are two of the largest companies in the world. That sort of involvement could have a significant effect on the final product. The U.S. FTC is also looking into other instances like Google’s and Amazon’s (again, two of the largest companies in the world) investments into Anthropic AI.