Morning Chronicle - Microsoft gives up OpenAI board seat amid regulator scrutiny

Microsoft's $13-billion tie-up with OpenAI has raised concerns on both sides of the Atlantic about just how much influence it has over its smaller partner.

Regulators began examining the partnership after an abortive boardroom coup last year against OpenAI CEO Sam Altman, whom Microsoft supported and even briefly hired.

It was after the turmoil in OpenAI that Microsoft got a seat on the board as a non-voting observer that it is now giving up.

Microsoft's withdrawal is "effective immediately", the letter said.

"Over the past eight months we have witnessed significant progress by the newly formed board and are confident in the company's direction," Microsoft wrote to OpenAI in the letter sent on Tuesday.

"We no longer believe our limited role as an observer is necessary."

The European Commission, the EU's influential antitrust regulator, last month concluded after a preliminary examination that Microsoft's investment did not mean it had taken control of OpenAI.

But Microsoft was still under examination over the observer seat on the board from British competition regulators, and faced a potential antitrust probe in the United States.

When OpenAI's ChatGPT chatbot hit the scene in November 2022, it marked the popular arrival of the AI revolution.

Media reports said Apple had similarly given up the chance to sit on OpenAI's board, but the iPhone maker was not immediately available for comment.

EU competition chief, Margrethe Vestager, has put big tech on alert over investments in the fast-growing AI market and insisted that the EU continues to keep an eye over the sector.

Brussels is now seeking more information from Microsoft about the agreement with OpenAI, Vestager said on June 28, to understand whether "certain exclusivity clauses could have a negative effect on competition".

Q.Young--MC-UK