As Microsoft leaves its observer seat, OpenAI says it won't have any more observers

Ivan Mehta
Updated ·2-min read

Months after Microsoft gained an observer seat on OpenAI's board, the company is leaving the position of the non-voting seat.

In a letter sent to OpenAI on Tuesday, Microsoft said that the company has seen enough progress being made in the AI company and is confident in its direction, according to Axios.

OpenAI said that after this change, there won't be any more observers on the board. That likely rules out reports of Apple gaining an observer seat. "We’re grateful to Microsoft for voicing confidence in the Board and the direction of the company, and we look forward to continuing our successful partnership," OpenAI said in a statement sent to TechCrunch.

"Under the leadership of CFO Sarah Friar, we are establishing a new approach to informing and engaging key strategic partners such as Microsoft and Apple, and investors, such as Thrive Capital and Khosla Ventures."

Microsoft took the observer position after Sam Altman was fired and eventually rehired by OpenAI last year, with most of the board — bar Quora CEO Adam D'Angelo — being reshuffled. The new board at OpenAI consists of former Salesforce co-CEO Bret Taylor; former Treasury Secretary Larry Summers; Instacart CEO Fidji Simo; ex-Sony Corp EVP Nicole Seligman; former Bill & Melinda Gates Foundation CEO Sue Desmond-Hellmann; ex-NSA head Paul Nakasone; and Sam Altman apart from D'Angelo.

Since changes at OpenAI last year, some top researchers, such as Andrej Karpathy and Ilya Sutskever, have left the company. After his departure, Sutskever founded a new AI company called Safe Superintelligence Inc., focusing on improving AI safety.

While Microsoft has left the observer seat, the company still owns 49% of the for-profit OpenAI after investing nearly $13 billion. This kind of partnership can draw the ire of antitrust regulators in the EU, according to a report from Reuters published in April.

Last month, Margrethe Vestager, the EU's executive vice president for competition policy, said that these kind of investments shouldn't become a vehicle for Big Tech companies to control other corporations.

"Microsoft has invested $13 billion in OpenAI over the years. But we have to make sure that partnerships like this do not become a disguise for one partner getting a controlling influence over the other," she said in a speech.

Alex Haffner, a competition partner at U.K.-based firm Fladgate, said that Microsoft is being careful not to draw more regulatory scrutiny over its investments.

"It is hard not to conclude that Microsoft’s decision has been heavily influenced by the ongoing competition/antitrust scrutiny of its (and other major tech players) influence over emerging AI players such as Open AI," Haffner told TechCrunch over email.

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