Microsoft gives up OpenAI board observer seat role

Microsoft has announced it will relinquish its observer seat on OpenAI’s board. In a letter, the tech giant expressed that over the past eight months, there has been “significant progress” and it now has “confidence in the company’s direction,” stating the observer seat “no longer necessary.”

This move comes after Microsoft assumed a non-voting, observer position on the board in November of the previous year when OpenAI CEO Sam Altman reassumed control of the company, which is known for operating the AI chatbot ChatGPT.

Despite expectations, Apple has also opted not to take up the observer role on OpenAI’s board. The decision was cited in a report by the Financial Times, which referenced a source directly familiar with the situation. This follows Apple’s recent announcement to integrate OpenAI’s ChatGPT into its devices.

Instead of traditional board roles, OpenAI is shifting towards a different model of engagement with its partners. According to an OpenAI spokesperson, under the guidance of the newly appointed chief financial officer Sarah Friar, the company will conduct regular meetings with its key partners instead. This includes Microsoft and Apple, as well as investors such as Thrive Capital and Khosla Ventures.

An OpenAI spokesperson said: “We’re grateful to Microsoft for voicing confidence in the board and the direction of the company, and we look forward to continuing our successful partnership.”

What did Microsoft say about the OpenAI board seat?

The initiative was described as “a new approach to informing and engaging key strategic partners.”

In the letter, Microsoft stated: “We appreciate the support shown by OpenAI leadership and the OpenAI board as we made this decision.

“As you know, we accepted the non-voting board observer role at a time when OpenAI was in the process of rebuilding its board.”

The company said the position provided insights into the board’s activities “without compromising its independence,” adding that it “appreciated the opportunity to serve as an observer during this period of change.”

It added: “Over the past eight months we have witnessed significant progress from the newly formed board and are confident in the company’s direction.”

“Given all of this we no longer believe our limited role as an observer is necessary,” Microsoft said.

Last month, EU antitrust regulators determined that the partnership between Microsoft and OpenAI would not fall under the bloc’s merger regulations, as Microsoft does not control OpenAI. Instead, the regulators plan to solicit opinions from third parties regarding the exclusivity clauses included in the agreement. In December, the United Kingdom’s Competition and Markets Authority (CMA) also announced it was investigating the collaboration.

Featured image: Canva / Brian Smale and Microsoft

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