TradeEdge Exchange:Microsoft relinquishes OpenAI board seat as regulators zero in on artificial intelligence

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Microsoft is giving up its seat on OpenAI's board, saying its presence is no longer necessary as the ChatGPT maker's governance has improved since its boardroom upheaval last year.

"We appreciate the support shown by OpenAI leadership and the OpenAI board as we made this decision," Microsoft stated in a Tuesday letter. The company's resignation is effective immediately, Microsoft said.

The unexpected exit comes as antitrust regulators scrutinize Microsoft's partnertship with OpenAI, under which the software giant invested billions in OpenAI.

Microsoft also took a seat on OpenAI's board after a chaotic period in which OpenAI CEO Sam Altman was abruptly fired, then reinstated, with the board members who orchestrated his ouster later pushed out.

"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 its letter. "Given all of this we no longer believe our limited role as an observer is necessary."

Microsoft's decision means that OpenAI will not have observer seats on its board.

"We are grateful to Microsoft for voicing confidence in the Board and the direction of the company, and we look forward to continuing our successful partnership," OpenAI said in a statement.

The Federal Trade Commission and Britain's regulatory agency have also been reviewing Microsoft's relationship with OpenAI, and European regulators last month said they'd take another look at the partnership under the 27-nation bloc's antitrust rules. 

—The Associated Press contributed to this report.

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• Microsoft
• OpenAI
• AI

Kate Gibson

Kate Gibson is a reporter for CBS MoneyWatch in New York, where she covers business and consumer finance.