Microsoft, Apple give up OpenAI board seats

Tech majors Microsoft and Apple are dropping out of their respective seats on the Board of Directors of AI startup OpenAI, the developer of generative chatbot ChatGPT, amid increasing regulatory scrutiny in Europe and the US over generative AI, according to reports.

Microsoft, OpenAI's largest investor, has quit as an observer on OpenAI's nonprofit board, a non-voting seat which it took in November last year.

Microsoft's Deputy General Counsel Keith Dolliver, in a letter to OpenAI, said the seat was no longer needed as the company had witnessed significant progress from the newly formed board.

Further, Apple, which was planning to join the Board following its recent AI development deal, is said to be no longer taking its board seat.

At the Worldwide Developers Conference in June, Apple announced its partnership with OpenAI to integrate ChatGPT into iOS 18.

As part of the collaboration, Phil Schiller, the former marketing head and chief of the App Store at Apple, was selected to have an observer role on OpenAI's board, and was expected to join later this year.

Confirming that Microsoft has given up its seat, OpenAI spokesperson Steve Sharpe reportedly 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."

"Under the leadership of CFO Sarah Friar, we are establishing a new approach to informing and engaging key strategic partners - such as Microsoft and Apple - and investors - such as Thrive Capital and Khosla Ventures."

The new approach by OpenAI is said to involve regular stakeholder meetings with Microsoft and Apple to share progress on its mission and ensure stronger collaboration across safety and security.

Microsoft took the non-voting board seat at OpenAI during the troubling period of the startup last year, when its co-founder Sam Altman was ousted from the Board and as CEO after alleging that he was not consistently candid in his communications.

Altman rejoined as CEO few days later, and also to the board after an independent Special Committee investigation found that his conduct did not mandate removal.

The news comes as the European Commission recently said Microsoft could face an antitrust investigation as the regulator was looking into some of the deals between large digital market players and generative AI developers and providers to find the impact of these partnerships on market dynamics.

The Commission in January said it was checking whether Microsoft's investment in OpenAI might be reviewable under the EU Merger Regulation.