Microsoft gives up observer seat on OpenAI board

10 Jul 2024

Image: © William/

The decision comes as Microsoft faces antitrust scrutiny in the US owing to its close ties to OpenAI.

Microsoft has decided to give up its observer seat on the board of OpenAI saying it has seen “significant progress” in the AI start-up and no longer feels it is necessary to hold one.

The non-voting observer seat was established when Microsoft played a key role in securing Sam Altman’s return to OpenAI as CEO in November after he was briefly fired from the company.

In a letter sent to OpenAI and seen by multiple outlets, Microsoft said it has witnessed significant progress from the newly formed board over the past eight months and is “confident” in the company’s direction.

“This position provided insights into the board’s activities without compromising its independence, and we appreciated the opportunity to serve as an observer during this period of change,” the letter reads. “Given [the progress] we no longer believe our limited role as an observer is necessary.”

Altman was unexpectedly fired by the company’s board of directors in November after a “deliberative review process”. The board claimed he had not been “consistently candid in his communications” and that it no longer had confidence in his ability to lead OpenAI.

But employees of the company, baffled by the lack of explanation given to them around Altman’s dismissal, put pressure on the board to resign and reinstate the former CEO in what they believed to be his rightful position.

Microsoft CEO Satya Nadella, said at the time that the new board was a first essential step on a path to “more stable, well-informed and effective governance”.

“Sam, Greg [Brockman]and I have talked and agreed they have a key role to play along with the OpenAI leadership team in ensuring OpenAI continues to thrive and build on its mission.”

Microsoft’s decision to give up the observer seat comes as the software giant faces antitrust regulatory scrutiny in the US owing to its close ties to OpenAI. Regulators want to probe whether deals existing between Microsoft, OpenAI and Nvidia give them an unfair advantage in the booming AI ecosystem.

Following a partnership between Apple and the ChatGPT maker last month, a recent Bloomberg report revealed that OpenAI was planning to give Apple executive Phil Schiller an observer seat.

However, following the departure of Microsoft, a source familiar with the matter told Axios that OpenAI no longer plans to have any observers on its board.

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Vish Gain is a journalist with Silicon Republic