Microsoft Gives Up Its OpenAI Board Seat

Microsoft has opted to give up its seat on OpenAI's board, a position it has held since the AI firm's tumultuous boardroom coup last year....
Microsoft Gives Up Its OpenAI Board Seat
Written by Matt Milano
  • Microsoft has opted to give up its seat on OpenAI’s board, a position it has held since the AI firm’s tumultuous boardroom coup last year.

    OpenAI’s board of directors stunned the industry when it fired CEO Sam Altman in late 2023. The fallout was swift and severe, with Microsoft hiring Altman and co-founder Greg Brockman, as well as offering to hire any and all OpenAI engineers that wished to leave. Following intense pressure from the company’s employees, as well as those outside the company, the board finally caved and brought Altman and Brockman back.

    In the aftermath of the coup, the majority of the board resigned, and Microsoft was given a seat on the board to help improve its governance. Microsoft CEO Satya Nadella made clear at the time that OpenAI’s governance model had to change.

    “At this point, I think it’s very clear that something has to change around the governance,” Nadella said in November 2023, adding that the company would have “a good dialogue with their board on that.”

    With the OpenAI’s boardroom drama largely stabilized, Microsoft is now giving up its board seat in an effort to stave off regulatory scrutiny. Regulators on both sides of the Atlantic have been taking a closer look at the AI industry, in particular the dominant role Big Tech companies are playing.

    Given that Microsoft is one of OpenAI’s largest donors, has a long-term contract with the firm, and had a seat on the board, the Redmond company evidently decided it would be prudent to relinquish its seat.

    “We appreciate the support shown by OpenAI leadership and the OpenAI board as we made this decision,” Microsoft said in a letter to OpenAI that was seen by Axios.

    “As you know, we accepted the non-voting board observer role at a time when OpenAI was in the process of rebuilding its board,” Microsoft continued. “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.

    “Over the past eight months we have witnessed significant progress from the newly formed board and are confident in the company’s direction.”

    “Given all of this we no longer believe our limited role as an observer is necessary,” Microsoft added.

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