Microsoft has relinquished its observer seat on the board of OpenAI, the developer of ChatGPT, as European and US regulators step up their scrutiny of the artificial intelligence (AI) market.
“Over the past eight months, we have seen significant progress from the new board and are confident in the trajectory of the company,” Microsoft said in a letter sent to OpenAI on Tuesday and seen by AFP on Wednesday.
“We do not believe our limited observer role is still necessary,” added the company founded by Bill Gates, specifying that this withdrawal took effect “immediately.”
Microsoft has invested around $13 billion in OpenAI since their partnership began in 2019, raising questions on both sides of the Atlantic about the extent of its influence over the California-based startup founded in 2015.
The software giant had been granted a non-voting observer seat on the board in November 2023, after a heated debate over whether or not Sam Altman should remain at the helm of the company. Altman eventually returned, backed by Microsoft.
Both companies market AI services to developers and individuals, and compete with Google and other tech giants in this space.
Since the launch of the ChatGPT interface in November 2022, a frantic race has indeed begun to gain the upper hand in so-called generative AI.
Developing this technology requires colossal investments, mainly in servers and processors to train the software, called language models, which will be able to respond to requests in everyday language.
Increased surveillance
Only a handful of tech giants have the capacity to commit the sums needed to become a legitimate player in generative AI, which is attracting increased scrutiny from regulators in Europe and the United States.
After an investigation, the European competition watchdog concluded in June that, “as things stand”, Microsoft had not acquired “lasting control” over OpenAI.
But the European Commission has requested new information from the software giant on the agreement between the two companies “to understand whether certain exclusivity clauses could have a negative effect on competition”.
The British competition authority, the CMA, has been assessing since December whether the partnership between the Redmond (Washington State, northwest United States) based IT company and OpenAI amounts to a merger.
The US competition authority (FTC) has also announced an investigation into the multi-billion dollar investments made by Microsoft, Google and Amazon in the leading generative AI start-ups, OpenAI and Anthropic.
“It seems clear that Microsoft’s decision was heavily influenced by the ongoing competition review of its (and other major tech players’) impact on emerging AI players like OpenAI,” commented Alex Haffner, a competition lawyer and partner at Fladgate.
“It’s clear that regulators are particularly interested in the complex web of relationships that tech giants have woven with artificial intelligence vendors, hence the need for Microsoft and others to carefully consider how they structure these partnerships going forward,” he continued.
Apple, which was due to get an observer seat on OpenAI’s board of directors, has withdrawn following Microsoft’s withdrawal, several media outlets reported.
Contacted by AFP, the Apple giant did not immediately respond.