Earlier this month, Microsoft withdrew from its role as an observer on the Open AI board. Apple, which was expected to take up a similar role, will not do so. Amid the massive global push for AI research, why would two of the biggest tech companies in the world want to dissociate from the organisation that made artificial general intelligence a household term around the world with the launch of its ChatGPT chatbot in 2022? Probably because of the increasing scrutiny on Big Tech’s investments and interests in AI research, say experts. What did Microsoft and Apple say about opting out of the Open AI board? Microsoft took a non-voting, observer position on OpenAI’s board in November 2023 when OpenAI CEO Sam Altman was reinstated to his position after a leadership crisis in the company. This allowed Microsoft to be a part of Open AI board meetings, and gave it access to confidential information. But it had no voting rights. On July 9, Microsoft, which has invested $10 billion in Open AI, said: “Over the past eight months, we have witnessed significant progress by 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.” Apple is not an investor in Open AI. But on June 10, the two companies announced a partnership, with Apple “integrating ChatGPT into experiences within iOS, iPadOS, and macOS, allowing users to access ChatGPT’s capabilities”. Apple was to get the observer role on OpenAI’s board as part of the deal. That will no longer happen, according to a person with direct knowledge of the matter, the Financial Times reported on July 10. So what is this concern over rising regulatory scrutiny over Big Tech? In January, the Federal Trade Commission (FTC), an independent agency under the US government that regulates unfair business practices, opened an inquiry to “scrutinize corporate partnerships and investments with AI providers to build a better internal understanding of these relationships and their impact on the competitive landscape”. Compulsory orders were sent to Alphabet (the holding company of Google), Amazon, Anthropic PBC (an AI research company in which both Google and Amazon have investments), Microsoft, and OpenAI, asking for details of “possession, custody, or control, including information maintained in a central data repository”, as well as “information relating to separately incorporated subsidiaries or affiliates”. Respondents are also required to disclose “the nature and extent” of their interaction with and influence over the partner company, and “any governance or oversight rights or options (e.g., Board seats)” that the companies might have with the partners. FTC chair Lina M Khan, who has in the past pursued antitrust cases and sued Amazon among others, said: “History shows that new technologies can create new markets and healthy competition. As companies race to develop and monetize AI, we must guard against tactics that foreclose this opportunity. “Our study will shed light on whether investments and partnerships pursued by dominant companies risk distorting innovation and undermining fair competition.” There is rising heat in Europe, too. Britain’s Competition and Markets Authority (CMA) said in April that it was “gathering information…to determine whether the $4 billion collaboration between Amazon and AI firm Anthropic.threatens competition in the UK”, and was looking at Microsoft’s partnerships with French AI startup Mistral and Inflection AI. On June 28, Margrethe Vestager, the European Union’s competition commissioner, said they couldn’t review Microsoft’s investments in OpenAI under merger rules, but they would send companies follow-up questions “to understand whether certain exclusivity clauses could have a negative effect on competitors”. She also said that AI “is developing at breakneck speed”, and “we cannot just sit back and see how things pan out… Strong competition enforcement is always needed at times of big industrial and tech changes.” But how do AI companies and Big Tech benefit from collaborating? While big companies benefit from the research of these startups and get to commercialise AI services across their range of products, the research companies benefit from the backing of Big Tech. Building AI tech involves huge amounts of data, intensive computing services, power-guzzling data centres, and highly-specialised and expensive chips. All of these can be provided by Big Tech companies. For example, one of the benefits of Open AI’s partnership with Microsoft is the cloud computing services that the company provides through Azure. Alongside working on its own AI products, Big Tech is involved with major AI companies. Microsoft is OpenAI’s biggest backer and has invested in Mistral. Google is the owner of the AI lab DeepMind, and has invested in OpenAI’s rival Anthropic. Nvidia, the market leader in making the high-processing chips or semiconductors that are key to the generative AI supply chain, backs several startups, including the large language model platform Cohere. So what is the problem here? Chatbots such as ChatGPT and Gemini, and digital assistants such as Siri are only the tip of the iceberg of AI research. The industry is at a nascent stage. Its potential is massive and could have far-reaching consequences on many aspects of life. Control by a select few will give them an unfair monopoly, and shut down competition or criticism of where the technology is heading. Big Tech’s involvement also means a push for quicker commercialisation — everyone wants to roll out their services quickly and make profits. This also means that there could be limited innovation and ground-breaking research — what all AI research companies claim to do.
