Microsoft modifies role in OpenAI due to regulatory scrutiny, strategic shifts

(MENAFN) Microsoft has decided to relinquish its observer seat on the board of OpenAI, a prominent artificial intelligence startup, amidst increasing regulatory scrutiny globally over tech giants' investments in AI ventures. The decision follows Microsoft's substantial USD13 billion investment in OpenAI, known for developing advanced AI technologies such as the ChatGPT chatbot.

In a letter addressed to OpenAI, Microsoft communicated its immediate withdrawal from the board role, citing a reassessment of its strategic engagement. Apple, which was expected to assume a similar observer role on OpenAI's board as part of negotiations to integrate ChatGPT into iPhones, reportedly declined the opportunity.

According to a statement reviewed by Sky News Arabia, OpenAI has unveiled a new approach to engage with key strategic partners, led by Sarah Friar, the company's newly appointed Chief Financial Officer. This approach includes regular meetings with partners like Microsoft and Apple, as well as investors such as Thrive Capital and Khosla Ventures, aiming to foster closer collaboration and alignment on strategic initiatives.

The decision to adjust Microsoft's board role coincides with ongoing antitrust investigations by authorities in the European Union and the United States, examining potential competition concerns stemming from Microsoft's significant investment in OpenAI. These investigations reflect broader regulatory scrutiny over the competitive dynamics within the rapidly expanding AI sector.

The move follows previous turbulence at OpenAI, including the abrupt ousting and subsequent reinstatement of CEO Sam Altman by the board last year, which temporarily unsettled the company's stability and, consequently, Microsoft's substantial investment. Microsoft initially transitioned to a non-voting role on the board following these events, aiming to maintain insights into OpenAI's operations while respecting the company's independence.

In his letter to OpenAI, Microsoft's Deputy General Counsel Keith Dolliver emphasized that the board observer role had provided valuable insights into OpenAI's governance activities without compromising its autonomy. Dolliver expressed confidence in the progress made by OpenAI's new leadership and board, indicating that Microsoft's continued board involvement was no longer deemed essential. Nevertheless, Dolliver reaffirmed OpenAI's status as one of Microsoft's most valuable partners, underscoring ongoing collaboration in advancing AI technologies and solutions. 

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