Monday, July 15, 2024

BNN Bloomberg: Microsoft and Apple withdraw from OpenAI board amid increasing scrutiny

Big Tech Pulls Back from OpenAI Board Amid Growing Regulatory Scrutiny

Microsoft and Apple Back Out of OpenAI Board Roles Amid Growing Regulatory Scrutiny

In a surprising turn of events, Microsoft Corp. and Apple Inc. have decided to withdraw from taking board roles at OpenAI, a move that highlights the increasing regulatory scrutiny surrounding Big Tech’s influence in the artificial intelligence (AI) space.

Microsoft, which had invested a substantial $13 billion in the ChatGPT creator, announced its decision to step back from the board in a letter to OpenAI, as reported by Bloomberg News. Apple was also set to take on a similar role on the board, but following Microsoft’s departure, OpenAI confirmed that there would be no board observers from the tech giant.

Regulators in both Europe and the U.S. had voiced concerns about Microsoft’s level of control over OpenAI, prompting pressure on the tech company to demonstrate a more arms-length relationship with the startup. Microsoft had integrated OpenAI’s services into its Windows and Copilot AI platforms and, like other tech behemoths, was betting on AI technology to drive future growth.

Despite citing significant progress within the newly formed board, Microsoft stated in the memo, “We no longer believe our limited role as an observer is necessary.”

This move comes as part of a broader wave of scrutiny surrounding Microsoft’s alleged dominance in the AI space. The U.S. has initiated separate investigations into Microsoft’s supposed control over the rapidly evolving field of AI, while also scrutinizing the company’s dealings with OpenAI rival Inflection AI.

European regulators have also indicated plans to survey Microsoft’s competitors regarding OpenAI’s exclusive utilization of its technology. In the U.K., the competition watchdog is considering a more extensive investigation into the partnership.

It is worth noting that this issue isn’t isolated to Microsoft alone. Other tech giants, such as Amazon and Nvidia, are also under the regulatory spotlight for their collaborations and dominance in the AI sector.

The world’s largest tech companies, including Microsoft, Nvidia, Alphabet, and Amazon, have collectively invested billions in AI businesses. While these investments are essential for the growth of startups, regulators are expressing concerns about potential concentration of innovative AI models among a select few tech giants.

Aside from financial investments, tech companies are also entering into non-financial agreements, such as Apple’s partnership with OpenAI to bring ChatGPT to the iPhone, and Microsoft’s recruitment of key individuals from OpenAI rival Inflection AI.

OpenAI, originally founded as a nonprofit research organization in 2015, has since transformed into a for-profit startup seeking investments and forging commercial partnerships. The company expressed gratitude to Microsoft for their confidence in the board and reiterated its commitment to collaboration with partners and investors.

As the AI landscape continues to evolve, with tech giants at the forefront, regulatory scrutiny and concerns about monopolistic practices are likely to persist. Microsoft and Apple’s decision to step back from OpenAI’s board roles only serve to underscore this ongoing dynamic.

Source: Bloomberg L.P. ©2024.

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