Camilla Hodgson and George Hammond, reporting for The Financial Times:

Microsoft has given up its seat as an observer on the board of OpenAI while Apple will not take up a similar position, amid growing scrutiny by global regulators of Big Tech’s investments in AI start-ups.

Microsoft, which has invested $13bn in the maker of the generative AI chatbot ChatGPT, said in a letter to OpenAI that its withdrawal from its board role would be “effective immediately”.

Apple had also been expected to take an observer role on OpenAI’s board as part of a deal to integrate ChatGPT into the iPhone maker’s devices, but would not do so, according to a person with direct knowledge of the matter. Apple declined to comment.

OpenAI would instead host regular meetings with partners such as Microsoft and Apple and investors Thrive Capital and Khosla Ventures — part of “a new approach to informing and engaging key strategic partners” under Sarah Friar, the former Nextdoor boss who was hired as its first chief financial officer last month, an OpenAI spokesperson said.

The news of Phil Schiller, an Apple fellow and the company’s former marketing chief, joining OpenAI’s board as an observer only broke earlier in July by Mark Gurman for Bloomberg, but nonetheless, he will no longer observe OpenAI’s operations. This move is so sudden that it’s giving me flashbacks to when Sam Altman, OpenAI’s chief executive, was ousted on a random Friday afternoon in November, just a week before Thanksgiving: Why would Schiller agree to join but then abdicate the seat just a few days (eight days, to be specific) later? After all, Apple and OpenAI only announced their partnership in June, and ChatGPT’s iOS integration hasn’t even shipped yet.

I agree with Microsoft’s assessment, which Keith Dolliver, the company’s deputy general counsel, describes as Microsoft witnessing “significant progress from the newly formed board.” Microsoft has held that seat for over seven months, but Schiller presumably didn’t even take his seat yet. The news of both companies forgoing their seats dropped simultaneously, which leads me to believe none of this is a coincidence.

I’m not leaning toward the side of suspicion yet — these are just board shenanigans, not major organizational changes like Altman’s ouster — but this news, according to an OpenAI spokesperson, collides with OpenAI providing updates to partners like Apple and Microsoft. The whole situation is unusual and leads me to believe some kerfuffle happened internally that again, OpenAI isn’t being direct about.

My best guess is that Microsoft was frustrated by Apple’s seat on the OpenAI board, which it got after paying absolutely nothing to OpenAI whereas Microsoft has invested billions into the company. The Financial Times reporters seem to surmise this is due to antitrust scrutiny, but I just don’t buy that. Instead, I have to believe Microsoft and Apple struck a deal where they would both leave their seats to settle the dispute. That makes reasonable sense to me.

As soon as I heard Apple wasn’t paying OpenAI for the deal, I knew Microsoft would be exasperated, and it seems like that was the case from this preliminary reporting. I very well could be incorrect — I have no sources within any of these companies — but that’s just my two cents.

(Also, I wouldn’t read into Apple not commenting on the Financial Times story much. This just doesn’t seem like something Apple would comment on, especially since the terms of the deal and the observer seat haven’t even been confirmed by the company — they’re just leaks. I don’t think it means Apple got the short end of the stick.)