Microsoft exits OpenAI's boardroom to sidestep regulatory scrutiny
(2024/07/10)
- Reference: 1720621806
- News link: https://www.theregister.co.uk/2024/07/10/microsoft_to_withdraw_from_openais/
- Source link:
Microsoft is giving up its non-voting observer seat on OpenAI's board, citing progress in the company's direction - yet fear of regulatory scrutiny no doubt also played some part in the decision-making process.
The non-voting observer at Microsoft was parachuted onto OpenAI's board following the [1]chaos of last year in which OpenAI CEO Sam Altman was unceremoniously ejected then swiftly welcomed back. Rattled by the antics at OpenAI and the impact on its multibillion-dollar investment in the company, Microsoft took the seat to keep tabs on things.
A European Commission review has since [2]cleared Microsoft of trying to exert control over OpenAI. However, regulators are continuing to examine the company's behavior amid worries over the impact on competition of OpenAI and Microsoft's partnership.
[3]
Microsoft's relationship with OpenAI and the billions it has invested into the company has also come under scrutiny by the [4]US Federal Trade Commission (FTC) as well as the UK's [5]Competition and Markets Authority (CMA).
[6]
[7]
While the European Commission opted not to pursue a review of the partnership under EU merger rules, the CMA's review is ongoing. Microsoft's decision to drop its non-voting observer seat means it has one less thing to defend regarding its relationship with OpenAI.
In the withdrawal letter seen by The Register , Keith Dolliver, Deputy General Counsel at Microsoft, wrote: "Over the past eight months we have witnessed significant progress by the newly formed board and are confident in the company's direction."
[8]Coders' Copilot code-copying copyright claims crumble against GitHub, Microsoft
[9]Not-so-OpenAI allegedly never bothered to report 2023 data breach
[10]Antitrust latest: Europe's Vestager warns Microsoft, OpenAI 'the story is not over'
[11]OpenAI, Google ink deals to augment AI efforts with news – it was Time for better sources
"This position provided insights into the board's transitional work without compromising its independence," he added.
Following Microsoft's investment in OpenAI, the tech giant has gained an apparent early lead in the generative AI race and [12]enjoyed increased earnings .
[13]
After Apple's [14]announcement that it would support OpenAI's ChatGPT in its products, the company was expected to take an observer seat on the board. However, according to reports, it has since elected not to.
Alex Haffner, a competition partner at law firm Fladgate, told The Reg : "It is hard not to conclude that Microsoft's decision has been heavily influenced by the ongoing competition/antitrust scrutiny of its (and other major tech players) influence over emerging AI players such as Open AI."
Haffner observed that Microsoft had scored a "win" at the end of June with the European Commission dropping the merger control probe of Microsoft and OpenAI. However, he pointed out that regulators were still looking at the impact on AI competition of arrangements made by big tech.
[15]
"It is clear that regulators are very much focused on the complex web of inter-relationships that big tech has created with AI providers, hence the need for Microsoft and others to carefully consider how they structure these arrangements going forward," said Haffner. ®
Get our [16]Tech Resources
[1] https://www.theregister.com/2023/11/21/microsoft_openai_altman_nadella/
[2] https://www.theregister.com/2024/06/29/microsoft_openai_eu/
[3] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/aiml&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2Zo6wIlhF5loWgU5MVhdZ7QAAAIc&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[4] https://www.theregister.com/2023/12/11/microsoft_openai_investment_ftc/
[5] https://www.theregister.com/2023/12/08/microsofts_relationship_with_openai_now/
[6] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/aiml&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44Zo6wIlhF5loWgU5MVhdZ7QAAAIc&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
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[8] https://www.theregister.com/2024/07/08/github_copilot_dmca/
[9] https://www.theregister.com/2024/07/08/infosec_in_brief/
[10] https://www.theregister.com/2024/06/29/microsoft_openai_eu/
[11] https://www.theregister.com/2024/06/28/openai_google_ai/
[12] https://www.theregister.com/2024/04/26/alphabet_microsoft_quarterly_results/
[13] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/aiml&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44Zo6wIlhF5loWgU5MVhdZ7QAAAIc&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[14] https://www.theregister.com/2024/06/10/apple_ai_wwdc/
[15] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/aiml&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33Zo6wIlhF5loWgU5MVhdZ7QAAAIc&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[16] https://whitepapers.theregister.com/
The non-voting observer at Microsoft was parachuted onto OpenAI's board following the [1]chaos of last year in which OpenAI CEO Sam Altman was unceremoniously ejected then swiftly welcomed back. Rattled by the antics at OpenAI and the impact on its multibillion-dollar investment in the company, Microsoft took the seat to keep tabs on things.
A European Commission review has since [2]cleared Microsoft of trying to exert control over OpenAI. However, regulators are continuing to examine the company's behavior amid worries over the impact on competition of OpenAI and Microsoft's partnership.
[3]
Microsoft's relationship with OpenAI and the billions it has invested into the company has also come under scrutiny by the [4]US Federal Trade Commission (FTC) as well as the UK's [5]Competition and Markets Authority (CMA).
[6]
[7]
While the European Commission opted not to pursue a review of the partnership under EU merger rules, the CMA's review is ongoing. Microsoft's decision to drop its non-voting observer seat means it has one less thing to defend regarding its relationship with OpenAI.
In the withdrawal letter seen by The Register , Keith Dolliver, Deputy General Counsel at Microsoft, wrote: "Over the past eight months we have witnessed significant progress by the newly formed board and are confident in the company's direction."
[8]Coders' Copilot code-copying copyright claims crumble against GitHub, Microsoft
[9]Not-so-OpenAI allegedly never bothered to report 2023 data breach
[10]Antitrust latest: Europe's Vestager warns Microsoft, OpenAI 'the story is not over'
[11]OpenAI, Google ink deals to augment AI efforts with news – it was Time for better sources
"This position provided insights into the board's transitional work without compromising its independence," he added.
Following Microsoft's investment in OpenAI, the tech giant has gained an apparent early lead in the generative AI race and [12]enjoyed increased earnings .
[13]
After Apple's [14]announcement that it would support OpenAI's ChatGPT in its products, the company was expected to take an observer seat on the board. However, according to reports, it has since elected not to.
Alex Haffner, a competition partner at law firm Fladgate, told The Reg : "It is hard not to conclude that Microsoft's decision has been heavily influenced by the ongoing competition/antitrust scrutiny of its (and other major tech players) influence over emerging AI players such as Open AI."
Haffner observed that Microsoft had scored a "win" at the end of June with the European Commission dropping the merger control probe of Microsoft and OpenAI. However, he pointed out that regulators were still looking at the impact on AI competition of arrangements made by big tech.
[15]
"It is clear that regulators are very much focused on the complex web of inter-relationships that big tech has created with AI providers, hence the need for Microsoft and others to carefully consider how they structure these arrangements going forward," said Haffner. ®
Get our [16]Tech Resources
[1] https://www.theregister.com/2023/11/21/microsoft_openai_altman_nadella/
[2] https://www.theregister.com/2024/06/29/microsoft_openai_eu/
[3] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/aiml&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2Zo6wIlhF5loWgU5MVhdZ7QAAAIc&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[4] https://www.theregister.com/2023/12/11/microsoft_openai_investment_ftc/
[5] https://www.theregister.com/2023/12/08/microsofts_relationship_with_openai_now/
[6] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/aiml&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44Zo6wIlhF5loWgU5MVhdZ7QAAAIc&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[7] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/aiml&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33Zo6wIlhF5loWgU5MVhdZ7QAAAIc&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[8] https://www.theregister.com/2024/07/08/github_copilot_dmca/
[9] https://www.theregister.com/2024/07/08/infosec_in_brief/
[10] https://www.theregister.com/2024/06/29/microsoft_openai_eu/
[11] https://www.theregister.com/2024/06/28/openai_google_ai/
[12] https://www.theregister.com/2024/04/26/alphabet_microsoft_quarterly_results/
[13] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/aiml&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44Zo6wIlhF5loWgU5MVhdZ7QAAAIc&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[14] https://www.theregister.com/2024/06/10/apple_ai_wwdc/
[15] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/aiml&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33Zo6wIlhF5loWgU5MVhdZ7QAAAIc&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[16] https://whitepapers.theregister.com/
So, Redmond is "confident in the company's direction"
Pascal Monett
Of course it is. When Ballmer was driving it into the wall it was also quite confident. It took the total disaster that was Vista to finally get rid of that clown.
I wonder what kind of disaster is going to make Redmond think about what it is doing.
It'll take one hell of a disaster when all the Board has to do is check its gold vaults to reassure itself.
Nonvoting observers...
Zibob
So they decided things are getting dicey enough that they didn't want to accidentally over hear board decisions that might be extremely illegal, and thus give themselves an out of "we didn't know, they are an independent company"
I would say clever, but that would imply its new and not what happens often, so often that it is my default thought.
ah
does it matter in the long term, AI hype is just demonstrating that this is the next 3d tv remind me the amazing future of that crap that we live in today