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Reports: OpenAI Won’t Give Microsoft a Board Seat

OpenAI and Microsoft

Some of OpenAI’s biggest investors are reportedly not invited to the company’s new board.

That includes Microsoft, which has invested more than $10 billion in the artificial intelligence (AI) company, according to published reports Tuesday (Nov. 29).

A report by Reuters quotes a source close to the matter who says the board — re-formed following the recent firing and rehiring of CEO Sam Altman — does not plan to give seats to Microsoft or investors like Khosla Ventures and Thrive Capital.

PYMNTS has contacted OpenAI for comment but has not yet received a reply. A spokesperson for Microsoft said the company had no comment.

Meanwhile, a separate report by The Information — again, citing a source familiar with the matter — said the board is expected to have nine members, and unlikely to include representatives from shareholders as it could conflict with the mission of the nonprofit overseeing OpenAI.

That report also notes that the three board members already announced — Chair Bret Taylor, former Treasury Secretary Larry Summers and Quora CEO Adam D’Angelo — are due to be confirmed as soon as this week.

“I do not know that it’s going to be the choice of OpenAI to leave Microsoft off the board,” Thomas Hayes, chairman of hedge fund Great Hill Capital, told Reuters.

“Microsoft will have something to say about it, given the amount of money that they have put behind them,” Hayes added, noting it wouldn’t be in the tech giant’s interest “to sit passively.”

But even before this turn of events, PYMNTS’ Karen Webster examined Microsoft’s precarious position regarding OpenAI and its board.

“Amazingly, Microsoft’s most recent 10-K fails to flag the risk that the technology foundation for its entire AI future — OpenAI — has a governance structure over which Microsoft, as a 49% equity holder, has no control nor seat at the table, and where the board is supposed to make decisions to benefit humanity without any framework other than their own,” she wrote in a Nov. 20 post.

“A board that gets to decide for the world what is good and what is bad, where bad seemed to be making money from the many incredible innovations that its technology would support.”

OpenAI removed its old board earlier this month following its leadership shakeup. The former board ousted Altman on Nov. 17 after holding a review that determined the chief executive had not been “consistently candid in his communications” with them.

However, Altman’s departure lasted only a few days. Though he briefly took a role with Microsoft heading up that company’s AI division, his supporters managed to arrange his return to OpenAI after most of the startup’s employees said they would resign if he was not reinstated.