Microsoft CEO Satya Nadella (right) speaks as OpenAI CEO Sam Altman (left) looks on at the OpenAI DevDay event in San Francisco on November 6, 2023.
Justin Sullivan | Getty Images
Microsoft Gave up observer seat on OpenAI board of directors. appleThe group was reportedly expected to adopt a similar observer position, but according to the group, it will no longer pursue that position. Financial Times. But whatever clarity this week’s changes aim to provide, many of the same concerns remain.
Regulators are not standing idly by, and for those concerned about the ethics of artificial intelligence, the same concerns — prioritizing profit over safety — remain. Amba Kak, co-executive director of the nonprofit AI Now Institute, described the announcement as a “ruse” designed to obscure the relationship between big tech companies and emerging players in artificial intelligence.
“The timing of this move is important,” Kak wrote in a message to CNBC. “This should be seen as a direct response to scrutiny by global regulators of these unconventional relationships.”
The close ties between Microsoft and OpenAI and the two companies’ outsized control of the artificial intelligence industry will continue to be scrutinized by the Federal Trade Commission, according to a person familiar with the matter who asked not to be named for confidentiality reasons.
At the same time, in the increasingly profitable artificial intelligence industry, a large number of artificial intelligence developers and researchers concerned about safety and ethical issues have remained indifferent. Current and former OpenAI employees published an open letter on June 4 expressing concerns about the rapid advancement of artificial intelligence despite a lack of oversight and whistleblower protections.
“AI companies have strong financial incentives to avoid effective oversight, and we believe bespoke corporate governance structures are insufficient to change this,” the employees wrote in the letter. They added that AI companies “currently have only tenuous obligations with The government shares some of this information without sharing it with civil society” and cannot “rely on them to share this information voluntarily”.
Days after the letter was published, a source familiar with the matter confirmed to CNBC that the FTC and Department of Justice were targeting OpenAI, Microsoft, and Nvidiafocusing on the company’s behavior.
FTC Chairman Lina Khan described her agency’s action as “a market investigation into emerging investments and partnerships between artificial intelligence developers and major cloud service providers.” Kak told CNBC that regulators’ efforts are helping to find answers and provide transparency.
Microsoft made no mention of regulators at all in its explanation for giving up its observer seat on the board. The software giant said it can exit now because it is satisfied with the structure of the startup’s board of directors. Since the huge investment, the board has been completely restructured in eight months.
Microsoft initially took a non-voting board seat at OpenAI in November following the Ultraman incident. New board members include former NSA Director Paul Nakasone, Quora CEO Adam D’Angelo, former Treasury Secretary Larry Summers, former Salesforce co-executive Bret Taylor and Altman. Also new in March are Dr. Sue Desmond-Hellmann, former CEO of the Bill & Melinda Gates Foundation; Nicole Seligman, former executive vice president of Sony; and Fidji Simo, CEO Instant shopping cart.
Following Microsoft’s announcement on Wednesday, OpenAI said Axios The company is changing the way it works with “strategic partners.” Apple has yet to issue a statement. None of the three companies commented to CNBC on the matter.
João Sedoc, assistant professor of technology at New York University’s Stern School of Business, said Microsoft’s latest move is positive for the artificial intelligence industry because of the company’s influence in OpenAI. He said it was “critical” for Microsoft to “step in and help stabilize” OpenAI after Altman was abruptly fired and quickly reinstated.
Sedoc said: “Microsoft’s presence does bring a mixture of conflicts of interest and competitive advantages. There is a strange relationship between Microsoft and OpenAI that is both synergistic and competitive.”
“There is a huge amount of information”
In addition to Microsoft’s approximately $13 billion investment in OpenAI, the two companies are working closely together to provide generative AI products and services. OpenAI’s popular ChatGPT chatbot is powered by its large language model, which runs on Microsoft’s Azure cloud technology.
But the two companies are not entirely aligned. Earlier this year, Microsoft reportedly paid $650 million Licensing Inflection AI’s technology and hiring key talent from the company, most notably CEO Mustafa Suleyman, who previously co-founded DeepMind, the artificial intelligence startup acquired by Google in 2014.
Ben Miller, chief executive of investment platform Fundrise, said that after the Inflection deal, Microsoft “is now becoming a real competitor to OpenAI,” meaning it shouldn’t be on the startup’s board.
“Having a voice at the table is extremely influential for the company and provides Microsoft with a wealth of information about its business activities,” Miller said.
Inflection.ai and DeepMind co-founder Mustafa Suleyman speaks on CNBC’s Squawk Box at the World Economic Forum Annual Meeting on January 17, 2024 in Davos, Switzerland.
Adam Galich | CNBC
Sedoc told CNBC the spinoff represents the right precedent as big tech companies increasingly become large investors in artificial intelligence. He cited Amazon-backed artificial intelligence startups such as Anthropic and Hugging Face, whose investors include Google, Amazon, Nvidia and others.
Sedok said they were “probably looking at the downstream implications of what this means for the overall development of the industry.”
However, Sedoc said there could be issues with AI safety.
“I think Microsoft has a lot of expertise and a long history of thinking in a lot of different areas that OpenAI doesn’t have,” Sedoc said. “From that perspective, I think there will be some negative consequences for them not being in the table.”
AI safety practices were at the heart of the disagreement between Altman and the early OpenAI board of directors, and continue to create divisions within the company.
In May, OpenAI disbanded a team focused on the long-term risks of artificial intelligence, just a year after the company announced its launch. The news comes days after OpenAI co-founders Ilya Sutskever and Jan Leike, two team leaders, announced they were leaving the company. In a post on
“Building machines that are smarter than humans is inherently dangerous work,” Lake writes. “OpenAI has a huge responsibility on behalf of all of humanity.”
When OpenAI announced the appointment of Nakasone to its board of directors last month, it said he would join the recently formed Safety and Security Committee. OpenAI said at the time that the group would spend 90 days evaluating the company’s processes and safeguards before making recommendations to the board and ultimately updating the public.
—CNBC’s Ryan Browne, Matt Clinch and Steve Kovach contributed reporting.
watch: OpenAI was hacked in April 2023 but was not disclosed to the public
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