Two of the biggest names in tech have quietly stepped away from OpenAI’s boardroom. Microsoft has relinquished its board observer seat, and Apple will not take the observer slot it was expected to receive. These decisions come as regulators in the U.S., U.K., and EU ramp up scrutiny of how Big Tech invests in and partners with AI startups. Here’s what changed, why it matters, and what to watch next.

What just happened

In July 2024, Microsoft announced it would step down from its nonvoting observer role on OpenAI’s board. Around the same time, reports indicated that Apple would forgo an observer seat that was under consideration as part of its partnership to bring ChatGPT to iOS 18. Both companies stated they would continue their commercial relationships with OpenAI regardless of board representation.

• Microsoft invested billions in OpenAI and deeply integrated OpenAI models into its products and Azure cloud. It became a board observer in late 2023 following OpenAI’s governance shakeup.
• Apple announced in June 2024 that ChatGPT would be available in iOS 18, iPadOS 18, and macOS Sequoia for certain tasks, with user consent. Although an Apple observer seat had been reported, it will not move forward.

These adjustments do not end the partnerships. They mainly remove a formal boardroom channel for information and influence that could have triggered additional antitrust scrutiny.

Why now: mounting regulatory pressure

Antitrust authorities have been signaling that Big Tech investments in AI could blur the lines between partnership and control. Regulators are concerned that observer seats, exclusive cloud deals, and default distribution arrangements might reduce competition or strengthen incumbents.

• U.S.: The Federal Trade Commission (FTC) launched a study in January 2024 into Big Tech’s investments and partnerships in generative AI, including Microsoft, OpenAI, Google, Amazon, and Anthropic. In June 2024, U.S. antitrust enforcers informally divided oversight: the Department of Justice focused on Nvidia, while the FTC led the oversight of Microsoft and OpenAI arrangements.
• U.K.: The Competition and Markets Authority (CMA) opened an inquiry into Microsoft’s relationship with OpenAI after governance changes in late 2023, questioning whether the partnership resembles a merger that requires review.
• EU: The European Commission sought input in January 2024 on Microsoft’s partnership with OpenAI. In June 2024, it indicated the deal didn’t meet thresholds under EU merger rules, but it still raised competition concerns regarding exclusive arrangements that could be examined under antitrust law.

In this context, stepping away from board observer seats is a low-cost way for Microsoft and Apple to mitigate regulatory risk without severing core technical and commercial ties.

What a board observer is – and is not

A board observer typically attends meetings and receives materials but does not have a vote. Observers can still gain early insights into strategy, risks, and financing, and they sometimes influence discussions. Regulators see these informal powers as potentially significant, particularly when combined with major investments and exclusive contracts.

By giving up observer status and Apple not pursuing one, both companies remove a visible channel of influence. However, this change doesn’t affect their commercial leverage regarding cloud, distribution, and default integrations.

Does this change control over OpenAI?

OpenAI is governed by a nonprofit parent that oversees the for-profit operating entity. Following a board crisis in November 2023, OpenAI restructured its board and added several outside directors. Microsoft never had voting control, and an observer seat did not provide it. This step back emphasizes a consistent public message: Microsoft is a key partner and investor, not the controller.

OpenAI’s governance continues to evolve, with additional independent directors joining in 2024. This shift aligns with a perception of an organization moving toward more formal and diversified oversight.

What it means for developers, customers, and partners

For most users and developers, there will be no day-to-day changes.

• Microsoft products: Copilot and Azure OpenAI Service will continue to provide access to OpenAI models. Technical and commercial integrations will stay intact.
• Apple platforms: ChatGPT access in iOS 18 and macOS will proceed with explicit user consent, and users will have the option to keep their data private by default unless they choose to share it with OpenAI. Apple highlighted choice and transparency in its announcement.
• OpenAI roadmap: Model releases, safety initiatives, and enterprise services will continue to be directed by OpenAI’s management and board, independently of observer seats.

The larger impact is strategic: with observers gone, Microsoft and Apple can better argue that their partnerships do not equate to control, even as they continue to compete and collaborate across AI services, devices, and cloud.

The antitrust context: what regulators care about

Enforcers are increasingly focused on how vertical relationships in AI might influence markets. Here are the questions they are asking:

• Cloud dependence: Do exclusive or preferential cloud-compute arrangements prevent rivals from accessing GPU capacity and model hosting on comparable terms?
• Default distribution: Do preinstalled or default AI assistants on operating systems or browsers disadvantage competing models and apps?
• Data and feedback loops: Do partnerships create privileged access to user data or product telemetry that reinforces the advantages of incumbents?
• Workarounds to merger rules: Are large hiring deals, licensing arrangements, or nonvoting stakes being leveraged to achieve merger-like influence without a formal acquisition?

In stepping back from observer seats, companies reduce one readily identifiable signal of influence. However, the main competition questions will stay focused on contracts, default status, data access, and compute economics.

What to watch next

• Contract terms: Keep an eye on disclosures or regulatory filings related to exclusivity, default settings, data-sharing, and termination rights in major AI partnerships.
• Compute markets: Expect ongoing scrutiny regarding access to GPU capacity, pricing, and whether vertically integrated cloud providers disadvantage independent model companies.
• Model neutrality in platforms: Platform rules for AI assistants and APIs, especially on mobile and desktop operating systems, will be a focal point for regulators and competitors.
• Global alignment: The U.S., U.K., and EU are not always in agreement, but their inquiries are converging. Parallel investigations can heighten pressure even when formal merger thresholds are not met.

Bottom line

Microsoft and Apple are not stepping away from OpenAI; they are distancing themselves from optics that could simplify regulators’ tasks. Their partnerships—cloud for Microsoft and distribution for Apple—remain robust. The true battleground will be the terms that determine access to compute, defaults, and data. That’s where antitrust enforcers are focusing their attention, and where businesses and developers should direct theirs as well.

FAQs

Does Microsoft still partner with OpenAI after giving up its observer seat?

Yes. Microsoft continues to offer OpenAI models through Azure and utilizes them across its Copilot products. This change affects only the nonvoting board observer role.

Will Apple still integrate ChatGPT into iOS 18?

Yes. Apple confirmed that ChatGPT will be available in iOS 18, iPadOS 18, and macOS Sequoia for certain tasks with explicit user consent, even without holding an OpenAI board observer seat.

What is a board observer seat?

This role allows a company to attend board meetings and receive materials without voting rights. Observers can still gain insights and exert informal influence, which is why regulators closely monitor these positions in sensitive partnerships.

Does this mean regulators are satisfied?

Not necessarily. While dropping observer seats alleviates one concern, authorities are still investigating issues related to cloud exclusivity, default distribution, and data access in AI partnerships.

Could there be more changes to these partnerships?

Possibly. As investigations unfold, companies might adjust contract terms or governance structures to address specific regulatory issues while maintaining commercial benefits.