Syed Imran Haider 
Microsoft holds an observer seat on the board of OpenAI, the company that launched ChatGPT. However, the software giant is now dropping this seat.
This is due to regulatory scrutiny focused on generative artificial intelligence (AI) in both the United States and Europe.
The decision
Late on Tuesday, Keith Dolliver, the deputy general counsel at Microsoft, wrote a letter to OpenAI. He said that they had gotten insights into the activities of the board through this position.
He added that it had not compromised the company’s independence. However, the letter said that Microsoft no longer needed the seat, as the newly formed board had made significant progress.
Previously, the European Commission had announced that there could be an antitrust investigation into Microsoft.
The Commission is taking a look at markets for generative artificial intelligence and virtual worlds. In January, the executive arm of the EU, said that it would look into some deals that had occurred.
It identified the tie-up between Microsoft and OpenAI as one such deal it would be looking into. Since then, the EU has concluded that OpenAI’s independence remained undisturbed with the observer seat.
However, regulators are now looking for third-party views in this regard. The Competition and Markets Authority in Britain also expressed its concerns.
The seat
In November, Microsoft had taken a nonvoting seat on OpenAI’s board. This was after there had been questions about the software giant’s interest in the startup.
OpenAI had gone through a turbulent period that saw its CEO Sam Altman first being fired and then rehired.
The CEO had mentioned in a note to employees that their choice to partner with Microsoft was the right one. He had added that he was excited to have Microsoft on the board.
In late 2022, OpenAI released its ChatGPT chatbot, which saw it become one of the hottest startups. People can take advantage of ChatGPT to get creative and smart answers to straightforward queries.
Microsoft and OpenAI
Microsoft’s investment in OpenAI has reportedly reached a whopping $13 billion. Due to its partnership with and investment in OpenAI, the tech giant is leading the push towards foundational AI models.
According to experts, Microsoft’s latest decision about dropping its observatory seat on the OpenAI board is undoubtedly due to regulatory scrutiny.
They have said that if not wholly, the decision is mostly driven by the increase in antitrust scrutiny and competition towards emerging AI players, including OpenAI.
It has become apparent that regulators are now focusing on the relationship between AI providers and companies in big tech.
Therefore, companies like Microsoft would have to carefully consider how they proceed in their arrangements and deals with AI-focused firms.
OpenAI has already become the center of controversy in various industries, as lawsuits have been filed against it for using data without proper authorization and consent.
The European Commission has also launched antitrust investigations in various companies that are part of big tech. These include Apple and Google and there is a chance that Microsoft could be next.
