Blue Whale News, July 11th (Reporter Zhu Junxi) As regulatory agencies around the world begin to tighten anti-monopoly investigations into tech giants in the AI industry, Microsoft and Apple have successively given up their observer seats on OpenAI's board of directors.
According to multiple media reports, Microsoft announced this decision in a letter to OpenAI on the evening of July 9th local time, stating that it would take immediate effect. Microsoft is OpenAI's largest shareholder with a total investment of over $13 billion. A spokesperson for OpenAI told Bloomberg that with Microsoft's exit, the company will no longer have the position of board observer.
This means that Apple, which was originally expected to join OpenAI as an observer through an AI collaboration agreement, will no longer take on this role. Earlier this month, it was announced that as part of Apple's partnership agreement with OpenAI, ChatGPT will be integrated into the new product matrix for iOS, iPadOS, and macOS. Additionally, Phil Schiller, the head of Apple's App Store and former marketing executive, was scheduled to serve as OpenAI's board observer later this year.
The scope of authority for OpenAI board observers includes the ability to participate in board meetings, obtain company decisions and confidential information, but they do not have voting rights in board elections and other matters. Microsoft entered the board of directors as an observer after the OpenAI "palace intrigue" incident in November last year, when OpenAI CEO Sam Altman was suddenly fired by the board. Later, with the support of Microsoft CEO Satya Nadella, he returned and restructured the board.
In a letter to OpenAI, Microsoft's Deputy General Counsel Keith Dolliver stated that the position of Board Observer allows Microsoft to gain a deeper understanding of the board's activities without compromising its independence. In the past eight months, we have witnessed significant progress made by the new board of directors and are confident in the direction of the company's development. Considering all of this, we no longer believe that our limited role as observers is necessary
OpenAI responded to the media that the company will hold regular meetings with partners such as Microsoft and Apple, as well as investors such as venture capital firms Thrive Capital and Khostra Ventures, to "share our mission progress and ensure strengthened cooperation in safety and security. This was also proposed under the leadership of Sarah Friar, the newly appointed CFO of OpenAI; quot; Part of the new approach to notifying and attracting key strategic partners.
But Microsoft's decision may not be voluntary.
Cori Crider, a director of Foxglove, a non-profit organization that has urged UK regulators to investigate Microsoft, told Bloomberg that "Microsoft's' giving up 'its seat on the OpenAI board is just another gamble on the chessboard. Big tech companies know that they are playing a cat and mouse game with antitrust enforcers on artificial intelligence issues
The close relationship between Microsoft and OpenAI has long attracted the attention of global regulatory agencies. After OpenAI's "palace intrigue", the European Union began to examine whether Microsoft's investment in OpenAI violated its merger rules. On June 28th, Margrethe Vestager, the Competition Commissioner of the European Commission, announced that the EU has concluded that Microsoft has not yet gained control over OpenAI. Although this review has come to a temporary end, she emphasized that "the story is not over yet" and the EU will further explore whether certain exclusive terms between Microsoft and OpenAI will have a negative impact on competitors.
Apart from OpenAI, Microsoft's other actions in the AI industry have not escaped the scrutiny of EU antitrust regulators. Margrethe Vestager stated that the European Union is investigating the so-called "acquisition employment" behavior, which refers to large technology companies attempting to acquire talent through recruitment.
In March of this year, Microsoft paid $650 million in cash to AI startup Reflection AI to obtain the company's technology licensing and hire most of its employees, including co founders. And Reflection AI was once a competitor to OpenAI, launching chatbots similar to ChatGPT.
Even in the United States, where AI regulation is cautious, Microsoft has been subject to antitrust scrutiny. In June, some media reported that the US Federal Trade Commission is leading a review of Microsoft's transactions with OpenAI and other AI companies.
A source from the agency told Reuters that Microsoft's decision to give up its observer seat on OpenAI's board of directors indicates that they are aware of the huge potential antitrust risks and are trying to seize the opportunity, but this change is unlikely to address the concerns of the Federal Trade Commission.
The approaching regulatory sword may make Apple, which is already lagging behind in the AI field, more cautious. While tech giants such as Microsoft, Google, and Meta are engaged in an AI arms race, Apple has been striving to catch up until June of this year when it unveiled its new AI system, "Apple Intelligence". Since it can no longer compete with companies such as OpenAI in AI technology research and development, Apple's strategy is to include these companies as its partners. According to previous media reports, in addition to OpenAI, Apple is also in talks with Google, AI startups Anthropic, Perplexity, and others to introduce their models or products into Apple Intelligence.
Apple has not ignored the important market of China either. Apple hopes to boost demand for new product lines such as the iPhone 16 through AI services, but due to issues with data security and compliance, these features are expected to be unavailable in China. Apple's head of software engineering, Craig Federighi, has stated that efforts are being made to find ways to introduce Apple Intelligence into the Chinese market, although there is no exact timeline yet, it is definitely something that needs to be done.
According to a report by The Wall Street Journal on June 20th, Apple is seeking Chinese partners for its AI services, including companies such as Baidu, Alibaba, and Baichuan Intelligence, but no agreement has been reached yet.