In a surprising move, Microsoft has announced its resignation from the board of OpenAI, stating that its participation is no longer necessary due to the significant improvements in the AI company's governance. The decision was confirmed through a letter on Tuesday, with Microsoft stating that it was resigning "effective immediately" from its role as an observer on OpenAI's board.

The technology giant expressed its gratitude for the support shown by OpenAI leadership and the board, acknowledging the progress made by the newly formed board over the past eight months. Microsoft's decision to step down from its seat comes after a tumultuous period of boardroom chaos at OpenAI last year, which resulted in the removal of certain board members and the reinstatement of CEO Sam Altman.

Microsoft's departure from OpenAI's board comes at a time of increased scrutiny from antitrust regulators regarding the powerful partnership between the two entities. European Union regulators recently announced their intention to review the partnership under the bloc's antitrust rules, while the U.S. Federal Trade Commission and Britain's competition watchdog have also been examining the pact. It is worth noting that Microsoft has reportedly invested $13 billion in OpenAI.

With Microsoft's resignation, OpenAI will no longer have observer seats on its board. However, the company expressed gratitude for Microsoft's confidence in the board's direction and the successful partnership they had developed. OpenAI further highlighted its intention to adopt a new approach in interacting with key strategic partners like Microsoft and Apple, as well as investors such as Thrive Capital and Khosla Ventures. Regular meetings will be held to update stakeholders on progress and ensure stronger collaboration on safety and security.

Industry experts speculate that Microsoft's decision may have been influenced by the increasing scrutiny big technology companies are facing, particularly regarding their partnerships with AI startups. Alex Haffner, a competition partner at U.K. law firm Fladgate, noted that regulators are focused on the intricate web of inter-relationships created by Big Tech with AI providers. This scrutiny calls for careful consideration by companies like Microsoft on how they structure such arrangements in the future.

Overall, Microsoft's resignation from the OpenAI board signifies the company's confidence in the AI company's improved governance and a commitment to navigate the evolving landscape of AI partnerships amidst regulatory scrutiny.