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Microsoft bows out of OpenAI's boardroom.

Looks like Microsoft's taking a step back from OpenAI's inner circle. They're giving up their observer seat on the board, saying they've seen enough progress to feel confident about OpenAI's direction.

What's going on here?

Microsoft's ditching its non-voting observer role on OpenAI's board, effective immediately.

What does this mean?

Microsoft says OpenAI's made "significant progress" in the last 8 months, so they don't need the insider view anymore. This move comes after Microsoft played a key role in bringing Sam Altman back as CEO in November 2023 and reshaping OpenAI's governance. At the time, Microsoft and Satya Nadella were focused on getting some say in how OpenAI operates.

They got some in the form of an observer seat. OpenAI's been busy rebuilding its board since then, adding heavy hitters like Larry Summers and ex-NSA official Paul Nakasone. There was chatter about Apple exec Phil Schiller getting an observer seat, but now OpenAI's scrapping the whole observer concept.

Instead, OpenAI is cooking up a "new approach" to keep strategic partners and investors in the loop, without giving them a seat at the table. These partners like Microsoft and Apple along with big-shot investors like Khosla Ventures and Thrive Capital will now get regular meetings with Sarah Friar, the former Nextdoor boss and now OpenAI’s CFO.

Why should I care?

The media is focused on the antitrust angle. They say this shake-up could mean smoother sailing for both companies. Microsoft dodges potential antitrust headaches, while OpenAI gets to run its ship without Big Tech looking over its shoulder.

But let’s brew some rumours here. OpenAI’s integration with Apple was less than stellar. OpenAI wasn’t getting paid for the integration either. Giving them a board seat would’ve been too much. What if Sam and Uncle Bret (Board chair) scrapped the observer seat system to get rid of this drama? I won’t be surprised.

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