Key takeaways:
- Microsoft sent a letter to OpenAI saying it is leaving the startup’s board “effective immediately.” The move comes soon after news broke that Apple would be joining the OpenAI board.
- Apple now will not join the board as well. Instead, OpenAI will hold individual meetings with its strategic investors and partners.
- Having Microsoft and Apple on the board could lead to inadvertent sharing of competitive secrets. The two are old arch enemies, which have split the PC world into two – Windows or Mac.
Microsoft has left OpenAI’s board shortly after news broke that Apple would be joining as an observer.
In a letter to OpenAI, Microsoft told the maker of ChatGPT that its exit would be “effective immediately,” according to the Financial Times of London.
Now, Apple will also not appoint an observer to the board. The iPhone maker was poised to join the OpenAI board after inking a deal in which ChatGPT will be integrated into its devices. Apple’s AI initiative is called “Apple Intelligence.”
Having two arch rivals – whose operating systems split the personal computing world in two – on the OpenAI board could lead to the inadvertent sharing of competitive secrets. Their founders – Bill Gates and Steve Jobs – famously clashed for decades but mended fences when Jobs was stricken with cancer.
OpenAI will have regular meetings instead with Microsoft, Apple and other investors and partners including Thrive Capital and Khosla Ventures, according to the FT. OpenAI said this will be a new approach to keeping strategic partners informed. CFO Sarah Friar will be handling these meetings.
Microsoft is facing antitrust probes in the EU and U.S. for its investment in OpenAI, which reportedly tops $13 billion. The software giant appointed an observer to OpenAI’s board following the firing and rehiring of CEO Sam Altman last November, amid internal chaos that later saw most directors replaced. Microsoft was seen as providing a seasoned, steady hand at the startup.
In the letter, Microsoft Deputy General Counsel Keith Dolliver wrote that “we have witnessed significant progress from the newly formed board and are confident in the company’s direction.” As such, an observer role was no longer “necessary,” according to the FT.
In June, the EU said it was exploring a possible antitrust probe of the two. In January, the U.S. Federal Trade Commission asked for more information into five generative AI investments and partnerships involving Microsoft, OpenAI, Alphabet (Google), Amazon and Anthropic.
However, an FTC source told FT that Microsoft leaving OpenAI’s board was “unlikely” to resolve concerns.
