By Mauro Orru and Christian Moess Laursen

Microsoft is relinquishing its seat as an observer on the board of ChatGPT maker OpenAI as regulators on both sides of the Atlantic scrutinize the partnership between the tech giant and the artificial intelligence startup.

In a letter sent Tuesday to the AI company led by Sam Altman, Microsoft said it had resigned with immediate effect because it believed OpenAI's board had gained enough stability to make Microsoft's involvement no longer necessary.

"Over the past eight months we have witnessed significant progress by the newly formed board and are confident in the company's direction," Microsoft said in the letter.

OpenAI went through a tumultuous period late last year with the abrupt firing and reinstatement of Sam Altman as chief executive along with the formation of the new board.

In that shake-up, Microsoft gained the non-voting observer position it has now given up, a role it said provided the tech giant with insights into transitional work from OpenAI's board without compromising its independence.

OpenAI said in a statement that it welcomed Microsoft's confidence in its board and the direction of the company.

"Moving forward, we will host regular stakeholder meetings to share progress on our mission and ensure stronger collaboration across safety and security," the startup said.

OpenAI started gaining traction in late 2022 after the release of its ChatGPT chatbot. Microsoft entered the picture as a major partner, agreeing to invest $13 billion in OpenAI in exchange for what is essentially a 49% stake in the earnings of its for-profit arm.

The observer role was part of that bigger tie-up, which is now facing antitrust scrutiny in the U.S. and Europe.

Earlier this year, the U.S. Federal Trade Commission opened a broad investigation of Microsoft's investment in OpenAI, while the U.K.'s Competition and Markets Authority said it was looking at whether the partnership should be considered a de facto merger.

The European Union also scrutinized the partnership from a merger control angle to determine whether Microsoft had acquired control on a lasting basis over OpenAI. Margrethe Vestager, the EU's competition czar, said last month that the bloc concluded this wasn't the case but pledged the EU would keep monitoring the relationship.

Microsoft has defended its longer running partnership with OpenAI, saying it has fostered more AI innovation and competition, while preserving independence for both companies.

Since the debut of ChatGPT and a slew of other AI offerings, tech and nontech companies have rushed to sign deals with AI firms like OpenAI, creating a patchwork of alliances across the tech world and through other industries. Apple has also recently partnered with OpenAI to bring its AI features to iPhones, iPads and Macs.

News Corp, owner of Dow Jones Newswires and The Wall Street Journal, has a content-licensing partnership with OpenAI.

Write to Mauro Orru at and Christian Moess Laursen at

(END) Dow Jones Newswires

07-10-24 0602ET