Microsoft, Apple will not join OpenAI’s board as regulatory scrutiny grows

Microsoft, the biggest backer and most important partner of ChatGPT-maker OpenAI, will abandon its advisory role on OpenAI’s board of directors, as governments in the United States and Europe take a closer look at the power Big Tech companies have over leading artificial intelligence start-ups.

Apple, which was slated to also take an advisory board role after striking a deal to integrate ChatGPT into its products last month, withdrew from its own plans to take an advisory role on OpenAI’s board, according to a report from the Financial Times, which also first reported Microsoft’s withdrawal.

A Microsoft spokesperson confirmed that the company will relinquish its board seat. Spokespeople for OpenAI and Apple did not immediately respond to requests for comment.

The rise of OpenAI and other AI start-ups such as Anthropic, spurred by interest in ChatGPT and other chatbots, shook up the tech industry last year. Analysts and tech leaders have suggested that the newcomers could usurp some of the power of dominant players such as Microsoft.

But OpenAI and other leading AI start-ups have become dependent on investment from the largest tech companies because of the immense costs of developing cutting-edge AI. Algorithms behind systems like ChatGPT are trained using expensive and power-hungry computer hardware.

Microsoft invested billions in OpenAI in early 2023, while Anthropic took on funding from Google and Amazon last year as well. But those deals have drawn attention from regulators. (Amazon founder Jeff Bezos owns The Washington Post.)

In January, the Federal Trade Commission said it would look into whether the investments and partnerships between AI companies and Big Tech are stifling true competition.

“Our study will shed light on whether investments and partnerships pursued by dominant companies risk distorting innovation and undermining fair competition,” FTC Chair Lina Khan said in a statement at the time.

OpenAI has been hiring lawyers and lobbyists at a rapid pace as it has grown and faced more legal and regulatory pressure. The company is facing a growing number of lawsuits from news organizations, authors and other content creators who say the company used their copyrighted work to train its AI algorithms without payment or permission.

Despite its prominence, OpenAI’s business is still nascent, and it needs to find many more customers if it is to turn a profit. Forming alliances with Big Tech can help AI start-ups gain access to billions of paying customers around the world, an easier path than developing new products from scratch.

OpenAI and Apple framed their recent deal as mutually beneficial, with Apple enhancing the iPhone by providing access to ChatGPT and OpenAI getting its technology introduced to users of Apple phones and computers.

Microsoft’s advisory role on OpenAI’s board was announced after the AI company’s dramatic boardroom showdown in November. Most of the company’s previous board voted to fire CEO Sam Altman, a move that drew outrage and shock from the tech world and threats from the majority of the company’s employees to leave the company. Altman was reinstated several days later, in a deal that saw almost all board members step down.