Microsoft Says It Doesn't Own Any Stake In Sam Altman-Led OpenAI

Satya Nadella-led Microsoft Corp, currently facing scrutiny from global regulators regarding its $13 billion investment in OpenAI, has said that it does not own any part of the ChatGPT fame company. Microsoft's January commitment of an additional $10 billion to OpenAI was structured to grant the tech giant a substantial share of the AI lab's profits until a set limit is reached, rather than a direct equity stake, Bloomberg reported.

Yet, regulatory authorities aren't necessarily swayed by such distinctions. The UK's Competition and Markets Authority is probing the potential competitive impact of the Microsoft-OpenAI collaboration, particularly concerning DeepMind's local operations. The US Federal Trade Commission is similarly assessing the partnership for antitrust compliance, although no formal inquiry has been launched.

Microsoft maintains that the transaction does not constitute control under US law, as it did not report the deal to antitrust agencies given OpenAI's non-profit nature. However, officials are reviewing the case to understand the extent of Microsoft's influence, Bloomberg reported.

Microsoft's spokesperson emphasised that the company doesn't own OpenAI but will receive profit shares. Brad Smith, Microsoft's President, pointed out that Microsoft's role is limited to a non-voting observer on OpenAI's board, marking a stark contrast to Google's acquisition of DeepMind.

OpenAI assures that the arrangement with Microsoft supports its independent research objectives, with the board observer lacking any governing power.

The recent dismissal and reinstatement of OpenAI's CEO Sam Altman underscored the delicate balance of independence and influence between the two firms. Despite concerns over regulatory perception, Microsoft opted for board representation to safeguard its investment.

As regulatory scrutiny intensifies, the European Commission and Germany's competition authority are monitoring the situation, indicating that Microsoft's innovative investment approach could invite further investigation as OpenAI's market presence grows. This partnership, according to Bloomberg Intelligence, could raise competitive issues if it affects Microsoft's AI endeavors or restricts OpenAI's collaboration with other tech firms.