In an unexpected move, tech giants Microsoft and Apple have stepped down from their OpenAI board observer roles. This decision is driven by increasing regulatory concerns over the influence big tech firms have over AI startups.
This shift is aimed at addressing competition concerns and ensuring that AI development remains independent and competitive.
Microsoft and Apple Step Back
Microsoft and Apple have both withdrawn from their board observer roles at OpenAI. This move comes in response to regulatory scrutiny concerning the relationships between major tech firms and influential AI start-ups.
Microsoft, which invested $13 billion in OpenAI, made its resignation effective immediately, just nine months after it assumed the role. Apple also decided not to proceed with its planned board seat following the recent announcement of a partnership with OpenAI.
Concerns About Big Tech’s Influence
The close ties between leading AI companies like OpenAI, Anthropic, and Mistral with their colossal investors have raised regulatory concerns. These alliances are believed to possibly reinforce Silicon Valley’s dominance over AI technology and hinder competition.
Last December, the UK’s Competition and Markets Authority (CMA) voiced its unease, stating that AI development is ‘unrivalled in economic history’. The CMA is assessing whether Microsoft’s partnership with OpenAI could be considered a merger.
Regulatory Investigations
The CMA is scrutinising the ‘multi-year, multi-billion dollar investment, collaboration in technology development, and exclusive provision of cloud services by Microsoft to OpenAI’. It aims to determine whether Microsoft exerts material influence over OpenAI.
In the US, the Federal Trade Commission is also examining the competitive implications of partnerships between large tech firms and AI start-ups.
By stepping back from the board seat, Microsoft aims to address these regulatory concerns.
European Commission’s Role
The European Commission reviewed Microsoft’s deal with OpenAI and concluded that the observer seat did not impact OpenAI’s independence or Microsoft’s influence over it.
However, an antitrust investigation is still under consideration by the European Commission.
OpenAI Leadership Turmoil
In November of last year, OpenAI faced significant upheaval when CEO Sam Altman was fired and rehired over a weekend. This event led to Microsoft taking a board observer role.
Given its substantial investment, many were surprised that Microsoft did not already hold a seat on the board.
Microsoft accepted the observer role during OpenAI’s transitional period without compromising OpenAI’s independence.
Competition Scrutiny
Alex Haffner, a competition partner at Fladgate, noted that Microsoft’s decision appears influenced by ongoing competition scrutiny. He pointed out that regulators are focused on the web of relationships that big tech has with AI providers.
Therefore, Microsoft and other major players must carefully consider how they structure these arrangements.
Conclusion
The withdrawal of Microsoft and Apple from OpenAI’s board highlights the growing regulatory scrutiny and the need for independence in AI development. Their decision aims to balance their significant investments and the regulatory expectations around competition and influence.
Microsoft and Apple’s withdrawal from their board roles at OpenAI reinforces the global need for maintaining independence in AI technologies.
This move is expected to alleviate some regulatory pressures and ensure a more competitive landscape in the AI industry.
