Top Line
Microsoft will relinquish its seat on OpenAI’s board of directors and Apple will no longer have a comparable role, reports said Wednesday, a surprising move for the two tech giants battling for AI dominance amid growing regulatory scrutiny over their investments in artificial intelligence.
Microsoft has reportedly relinquished its non-voting observer position on OpenAI’s board of directors.
Key Facts
Important Quotes
“We are forced to conclude that Microsoft’s decision is heavily influenced by the ongoing competition and antitrust investigation into the company’s (and other large tech companies’) influence over emerging AI companies such as Open AI,” Alex Hafner, a competition law partner at UK law firm Fladgate, said in a statement to Forbes. While Microsoft may have scored a “win” when the EU Commission announced in June that it was dropping its investigation into Microsoft and Open AI, the powerful regulator made it clear that it is still investigating relationships between companies in the AI space and is “highly focused on the complex web of interactions that large tech companies have forged with AI providers.” With that in mind, Hafner said, “Microsoft and others will need to think carefully about how they structure these arrangements going forward.”
Main Background
After a decade of thriving with minimal antitrust oversight, Silicon Valley giants have come under pressure in recent years from global competition regulators, including the Federal Trade Commission in the United States, due to their enormous influence and scale. Investigations and enforcement have focused on areas central to the digital economy, including how tech companies such as Apple and Google dominate online marketplaces and apps, how companies such as Meta tackle privacy and advertising, and anti-competitive acquisitions such as Microsoft’s $69 billion purchase of game studio Blizzard. Growing interest in generative AI, which began with the launch of OpenAI’s chatbot assistant ChatGPT in late 2022, has spurred a race to develop increasingly sophisticated AI tools that involve both tech giants and startups. The companies develop tools such as OpenAI’s Sora, Google’s Gemini, Microsoft’s Copilot, Adobe’s Firefly, and Anthropic’s Claude, raising concerns about the technology’s impact on jobs and its potential to spread misinformation. Antitrust regulators are concerned that giants like chip makers Nvidia, Microsoft and Amazon could thwart smaller companies. Microsoft, for example, is under investigation in Europe and the U.S. for AI deals including its $13 billion investment in OpenAI and its $4 billion “hire by acquisition” deal for startup Inflection. Google is facing scrutiny over its plans to pre-install Gemini AI on Samsung phones. Amazon is facing scrutiny over its $4 billion investment in Anthropic.
Forbes Rating
Altman has an estimated net worth of $1 billion. His wealth comes primarily from his role as a venture capitalist, not from not owning shares in OpenAI. Prior to founding OpenAI, Altman founded social mapping company Loopt and was a partner and president of tech startup accelerator Y Combinator, from which he left to focus on AI startups. His investments include investments in fintech darling Stripe, social media platform Reddit, and fusion venture Helion.
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