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Microsoft, Apple nix OpenAI board seats as antitrust scrutiny mounts

Microsoft and Apple have reportedly abandoned plans to join OpenAI’s board of directors as observers, a move that comes as both tech giants face increased antitrust scrutiny in the US and Europe.

Microsoft, which has invested $13 billion in CEO Sam Altman’s ChatGPT maker, notified OpenAI in a letter late Tuesday that it was giving up its non-voting board seat, effective immediately. The Financial Times reported..

After an internal coup to oust Altman caused turmoil at the AI ​​company last fall, Satya Nadella’s Microsoft was set to join OpenAI’s board of directors, and Nadella reportedly played a key role in the negotiations that ultimately led to Altman being restored to his post as part of an overhaul of the board.

Microsoft will relinquish its non-voting observer status on the OpenAI Board. AP

“Over the past eight months, we have seen great progress from our newly formed board and are confident in the direction of the company,” Microsoft wrote in the memo. According to Bloomberg“We no longer believe that a limited role as observers is necessary.”

Additionally, Apple, which was set to take an observer seat after signing a deal to bring ChatGPT features to its most powerful iPhones later this year, will not go ahead with the plan, the outlet reported, citing sources with direct knowledge of the matter.

Until just last week, Apple’s App Store chief Phil Schiller was expected to take the position. According to Bloomberg.

“We appreciate Microsoft’s expression of confidence in the board and the direction of the company, and we look forward to our continued successful partnership,” OpenAI said in a statement.

The Washington Post has reached out to the three companies for further comment.

Antitrust authorities in the U.S. and Europe have raised concerns about OpenAI’s close ties to Microsoft, which did not receive any equity as part of its investment but did receive a cut of profits.

Pictured is OpenAI CEO Sam Altman. Reuters
Apple faces antitrust lawsuits in the United States and Europe. Reuters

In June, reports emerged that the Federal Trade Commission would be spearheading an antitrust investigation into Microsoft and OpenAI, while the Department of Justice would be investigating AI chip supplier Nvidia.

The agency has already announced an investigation into partnerships between major tech companies and AI startups, such as Microsoft’s partnership with OpenAI and Google and Amazon’s investment in Anthropik.

The European Commission, the European Union’s antitrust watchdog, said last month it was preparing an investigation into whether the deal would harm competition.

Microsoft has poured $13 billion into OpenAI. Reuters

Meanwhile, the Department of Justice filed a landmark antitrust lawsuit against Apple, alleging that the company took illegal tactics to ensure the iPhone’s dominance in the smartphone market.

Meanwhile, the European Commission has accused Apple of violating broad technology competition law by stifling rivals within its App Store, and the company faces potentially billions of dollars in fines.