The unexpected move by Apple Inc. and Microsoft Corp. to rescind their plans to join the board of OpenAI highlights the regulatory concern that Big Tech’s influence over artificial intelligence is receiving.
Startup Won’t Have Board Observers Following Microsoft’s Exit
Microsoft, which gave the inventor of ChatGPT $13 billion in investment, said on Tuesday that it will be leaving its observer position on the board in a letter to OpenAI that was obtained by Bloomberg News. Although an OpenAI spokesman stated the startup won’t have board observers following Microsoft’s exit, Apple was expected to assume a similar position.
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Authorities in the US and Europe had voiced worries regarding Microsoft’s influence with OpenAI, placing pressure on one of the most valuable firms in the world to demonstrate that it is maintaining an arm’s length relationship. Like many other US IT businesses, Microsoft is counting on the new technology to spur growth and has included OpenAI’s services into its Windows and Copilot AI platforms.
Nonetheless, a person familiar with the Federal Trade Commission’s thinking said that the resignation of the board is unlikely to allay worries about Microsoft’s collaboration with OpenAI.
“Microsoft’s relinquishing its OpenAI board seat is merely another move on the chessboard,” stated Cori Crider, director of Foxglove, whose legal firm is advocating for increased antitrust examination of the association. “Big Tech is aware that they are battling antitrust authorities over AI in a game of cat and mouse.”
Microsoft’s departure was first reported by The Financial Times.
AI Exam
Microsoft is under increased scrutiny due to its purported superiority in artificial intelligence. As part of a larger investigation into Big Tech companies and their alliances with AI startups, the US Federal Trade Commission announced in January that it was investigating Microsoft’s investment in OpenAI. Meanwhile, according to people familiar with the situation, the US is investigating whether the business appropriately informed antitrust authorities about its agreement with an OpenAI competitor, Inflection AI.
The UK’s competition regulator is considering a more thorough examination of the partnership, while European regulators also announced that they will question Microsoft’s competitors on OpenAI’s exclusive use of its technology.
We’re not singling out Microsoft. The $4 billion agreement between Amazon.com Inc. and AI startup Anthropic is also being investigated by the UK, which is worried that big tech firms are exploiting these alliances to “shield themselves from competition.” Investigating Nvidia Corp.’s hegemony over AI processors is the US.
In New York trade, Microsoft shares increased 0.4% to $461.38 at 11:31 a.m. To $231.19, Apple increased 1.1%.
Large Tech Investments
The largest US IT firms, such as Microsoft, Nvidia, Alphabet Inc., and Amazon.com, have invested tens of billions of dollars in artificial intelligence startups. Regulators are concerned that these alliances and investments could potentially consolidate access to the most cutting-edge large language models among the major corporations that currently hold a monopoly, even if these investments are crucial for startups.
Microsoft’s Decision To Hire Mustafa Suleyman Of Inflection AI
Tech behemoths are also reaching non-monetary deals. These include Microsoft’s earlier this year decision to hire Mustafa Suleyman of Inflection AI and the majority of his crew from the OpenAI competitor, and Apple’s collaboration with OpenAI to deliver ChatGPT to the iPhone.
A few weeks after the startup’s directors abruptly ousted Chief Executive Officer Sam Altman in a dramatic move over the company’s future, Microsoft assumed the non-voting observer position on OpenAI’s board last year. After a backlash from the staff, Altman was swiftly restored, and the board was reconfigured.
OpenAI said in a statement to Bloomberg News, “We’re grateful to Microsoft for voicing confidence in the board and the direction of the company, and we look forward to continuing our successful partnership,” without making any direct reference to the choices made by Apple or Microsoft.
According to OpenAI, going ahead, the business would convene frequent stakeholder meetings with investors and partners, such as Khosla Ventures and Thrive Capital, “to ensure stronger collaboration across safety and security and share progress on our mission.”
Originally founded in 2015 as a nonprofit research organization, OpenAI later changed its organizational structure to incorporate a for-profit startup that has raised capital and entered into business agreements.
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