Microsoft gives up its observer seat on OpenAI’s board

Yesterday Microsoft announced that it was giving up its observer board seat at OpenAI, a company it has invested over $10 billion in and whose AI models are heavily integrated across the Microsoft product line.

Microsoft’s board seat was a nonvoting seat, meaning they were only on it to observe what the board was doing. The seat was secured back in November 2023 when OpenAI went through an upheaval following the previous board’s sudden firing of CEO Sam Altman and the subsequent replacement of the entire board. 

In a letter to OpenAI, Microsoft reasoned that it no longer needed the seat because it believed OpenAI had improved governance since obtaining the seat. “Over the past eight months we have witnessed significant progress by the newly formed board and are confident in the company’s direction. Given all of this we no longer believe our limited role as an observer is necessary,” Microsoft wrote in its letter to OpenAI. 

“We are 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.

Apple was also reportedly planning to join the board, but that plan appears to have been scrapped now as well. Apple’s App Store chief Phil Schiller was to join the board in an observer role to learn more about OpenAI because of its recent partnership with the company. 

Instead, OpenAI will regularly host stakeholder meetings so that it can share it progress with Microsoft and Apple. 

Microsoft’s announcement follows last month’s report that the Federal Trade Commission (FTC) was going to start investigating Microsoft and OpenAI for antitrust practices related to Microsoft’s relationship with the company. 

Later that month Microsoft was also hit with an antitrust violation warning in the EU related to bundling Teams in Microsoft 365. 

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