Microsoft resigns from OpenAI board amid increasing antitrust scrutiny over AI deals

Microsoft has resigned from its seat on OpenAI’s board, saying its participation is no longer needed as the ChatGPT maker has improved the company’s governance since the boardroom chaos last year.

In a letter sent Tuesday, Microsoft confirmed it was resigning “effective immediately” from its observer role on the artificial intelligence company’s board.

“We appreciate the support provided by OpenAI’s leadership and the OpenAI board in making this decision,” the letter reads.

The surprise departure comes amid growing scrutiny from antitrust regulators of the powerful AI partnership, which Microsoft reportedly invested $13 billion in OpenAI.

European Union regulators said last month they would take a fresh look at the partnership under the 27-nation bloc’s antitrust rules. Meanwhile, the U.S. Federal Trade Commission and Britain’s competition watchdog are also investigating the deal.

Microsoft took over the board seat after a power struggle that saw OpenAI CEO Sam Altman fired and then quickly reinstated, while board members who advocated for his ouster were ousted.

“We have seen significant progress from the newly formed board over the past eight months, and we are confident in the direction the company is headed,” Microsoft said in its letter. “Given all of this, we no longer believe our limited observer role is necessary.”

With Microsoft leaving, OpenAI will no longer have observers on its board.

“We are grateful to Microsoft for expressing their confidence in our management and the direction of the company, and we look forward to continuing our successful partnership,” OpenAI said in a statement.

It’s easy to conclude that Microsoft’s decision to get rid of the board position was largely driven by the growing scrutiny of big tech companies and their ties to artificial intelligence startups, said Alex Haffner, an antitrust partner at British law firm Fladgate.

“It’s clear that regulators are very focused on the complex web of interconnectedness that big tech companies have created with AI vendors, and it’s imperative that Microsoft and others consider carefully how they structure those arrangements going forward,” he said.

OpenAI said it will take a new approach to “informing and engaging key strategic partners” like Microsoft and Apple, and investors like Thrive Capital and Khosla Ventures, holding regular meetings to update stakeholders on progress and ensure closer collaboration on security.