Microsoft to relinquish its observer seat on OpenAI board – report

Microsoft (NASDAQ:) announced it will relinquish its observer seat on the OpenAI board amid increasing regulatory scrutiny over generative AI in Europe and the U.S., according to CNBC.

Keith Dolliver, Microsoft’s Deputy General Counsel, wrote to OpenAI on Tuesday, stating that while the observer seat provided valuable insights into the board’s activities without compromising its independence, it was no longer necessary.

The letter, seen by CNBC, noted that Microsoft had “witnessed significant progress from the newly formed board.”

The European Commission had previously indicated that Microsoft might face an antitrust investigation, focusing on the markets for virtual worlds and generative AI. In January, the Commission, the EU’s executive arm, said it was examining agreements between major digital market players and generative AI developers, specifically highlighting the Microsoft-OpenAI partnership.

Although the EU concluded that Microsoft’s observer seat did not impact OpenAI’s independence, regulators are seeking additional third-party opinions on the partnership. Meanwhile, Britain’s Competition and Markets Authority remains concerned.

Microsoft initially took a nonvoting board seat at OpenAI in November to address questions about its intentions with the startup, following a period of upheaval that saw OpenAI CEO Sam Altman fired and then quickly reinstated.

Microsoft has invested heavily in the ChatGPT maker, with its total investment reportedly reaching $13 billion.