Microsoft withdraws observer seat on OpenAI board that sparked scrutiny

Microsoft on Tuesday resigned from its observer role on OpenAI’s board amid heightened scrutiny from U.S. and European antitrust regulators over the partnership between the two tech giants.

Microsoft sent a letter on Tuesday to the artificial intelligence (AI) company that makes ChatGPT, saying it would give up the observer seat “effective immediately.”

“We appreciate the support shown by OpenAI leadership and the OpenAI board as we made this decision,” Microsoft said in its letter.

Microsoft said its presence was no longer needed on the board as, the company said, OpenAI’s governance has greatly improved since last year’s chaotic board turnover.

After OpenAI CEO Sam Altman was ousted by board members last year, Microsoft helped orchestrate a comeback that reinstated Altman as chief executive, ousted board members who opposed him, and gave Microsoft a observer seat.

“Over the past eight months, we have witnessed significant progress from the newly formed board and we are confident in the direction of the company,” Microsoft said in the letter. “Given all this, we no longer believe that our limited role as observers is necessary.”

The surprise firing comes as regulators step up their efforts to crack down on the powerful partnership between the two AI companies. Microsoft reportedly invested $13 billion in Altman’s OpenAI, The Associated Press reported.

Antitrust regulators at the US Federal Trade Commission (FTC) are investigating OpenAI and Microsoft over their role in the fast-growing AI industry.

The Biden administrationpushed for greater regulationof the AI ​​industry, fearful that major technology companies could quickly gain dominance over the developing technology.

The FTC previously launched a similar investigation into Microsoft, Amazon and Google’s investments in OpenAI and AI startup Anthropic in January.

FTC Chair Lina Khan said at the time that the agency would scrutinize agreements that “would allow dominant companies to exert undue influence or gain privileged access in ways that could undermine fair competition.”

The Associated Press contributed.

This story originally appeared on thehill.com read the full story