Microsoft has withdrawn its observer seat on OpenAI's board and Apple will now not take up a similar role. These moves come amid growing regulatory scrutiny of big tech's involvement in artificial intelligence startups, highlighting the complex interplay between innovation, competition, and regulatory compliance in the rapidly evolving AI sector.
Microsoft, OpenAI's largest financial backer with an investment reportedly worth up to $13 billion, announced the decision in a letter to the startup. The tech giant cited significant progress made by OpenAI's new board, formed after last year's dramatic leadership shake-up involving CEO Sam Altman. Microsoft expressed confidence in OpenAI's direction, including its commitment to safety and culture-building.
However, industry insiders suggest that regulatory concerns played a crucial role in this decision. The UK's Competition and Markets Authority (CMA) is currently reviewing whether the partnership has resulted in what is effectively "an acquisition of control", while the US Federal Trade Commission (FTC) is also examining the relationship. The European Commission, although not conducting a formal merger review, is scrutinising exclusivity clauses in the agreement between the companies.
Apple's decision to forgo a board observer role, despite its recently announced collaboration with OpenAI, further underscores the shifting dynamics in the AI landscape. The Cupertino-based company had been expected to place Phil Schiller, head of its App Store unit, on the board as part of an agreement announced in June.
These developments reflect a broader trend of regulatory bodies examining investments in AI startups. The FTC is also looking into tie-ups between Anthropic, the company behind the Claude chatbot, and tech powerhouses Google and Amazon. In the UK, the CMA is investigating Amazon's partnerships with Anthropic, as well as Microsoft's collaborations with Mistral and Inflection AI.
The implications of these moves are far-reaching. The intricate web of partnerships between big tech companies in the realm of generative AI continues to grow, driven by the escalating costs associated with developing and maintaining large language models. This trend is mirrored on a global scale, with concerns about AI supply extending to international relations, as evidenced by US representatives' apprehensions about AI technology reaching China.
Despite Microsoft's withdrawal from the board, the competitive advantage gained from its insider position may have lasting effects. If Microsoft ultimately outpaces its competitors in the AI race, some might draw parallels to Ben Johnson's steroid-fuelled gold medal win at the 1988 Seoul Olympics – a comparison that, while speculative, underscores the potential long-term impact of Microsoft's privileged position.
Apple's approach, on the other hand, offers flexibility. By forgoing a board observer status, the company maintains the ability to distance itself from OpenAI should any public relations issues arise or if a competitor gains a clear advantage. This strategy of "disposability" could prove advantageous in the fast-paced and unpredictable world of AI development.
In response to these shifts, OpenAI is establishing a new approach to engaging with key stakeholders. The company plans to host regular meetings with strategic partners, which includes the likes of Microsoft and Apple, aiming to foster collaboration on safety and security while keeping partners informed of progress.
The delicate balance between innovation, competition, and regulatory compliance will shape the future of AI. As regulators intensify their scrutiny, companies must find new ways to collaborate, innovate, and compete without running afoul of antitrust laws. The coming months and years will likely see further shifts in partnerships and strategies as the industry adapts to this new reality.
The tech giants' retreat from OpenAI's board may well be just the opening move in a much larger game of AI chess.