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Microsoft Says It’s OK With OpenAI Structure Following Altman Reinstatement

Microsoft and OpenAI

Microsoft CEO Satya Nadella says he has no problem with partner OpenAI’s governing makeup.

His comments, as reported Tuesday (Jan. 15) by Reuters, came two months after the artificial intelligence (AI) startup briefly fired CEO Sam Altman.

“I’m comfortable. I have no issues with any structure,” Nadella said at a Bloomberg News event at the World Economic Forum’s annual meeting in Davos, Switzerland.

Altman’s ouster only lasted a few days, but it led to a crisis at the startup, with workers leaving in droves for Microsoft — a major investor in OpenAI — and others threatening to quit if the CEO was not rehired. Altman was reinstated under a new board, with Microsoft getting a non-voting observer role.

Meanwhile, competition watchdogs in Europe and the U.K. have begun taking a closer look at the relationship between the two companies.

The European Commission said earlier this month it wants to see whether Microsoft’s involvement with OpenAI warrants further investigation.

“Virtual worlds and generative AI are rapidly developing,” Margrethe Vestager, the commission’s executive vice president in charge of competition policy, said in a news release. “It is fundamental that these new markets stay competitive, and that nothing stands in the way of businesses growing and providing the best and most innovative products to consumers.”

And the United Kingdom’s Competition and Markets Authority (CMA) said last month that it hopes to determine if “recent developments” have created a merger situation and if a merger could affect competition in Great Britain.

The CMA issued an Invitation to Comment (ITC) that offers Microsoft, OpenAI and interested third parties the opportunity to comment on these issues before the regulator determines whether it will open a formal investigation.

The Reuters report notes that the agreement between the companies guarantees Microsoft large portions of OpenAI’s profits under certain conditions, according to a source briefed on the terms of the deal.

Nadella told Reuters that the fact that Microsoft does not fully own OpenAI distinguished their deal in a pro-competition way.

“Partnerships is one avenue of, in fact, having competition,” he said.

Microsoft’s investments in computing power and in OpenAI before ChatGPT became famous, he added, were a “highly risky bet” and “not all conventional wisdom.