Microsoft has decided to relinquish its observer seat on OpenAI's board, a position it took on last year amidst regulatory concerns. The decision comes as OpenAI's governance has significantly improved over the past eight months. Apple, which was expected to take up the observer role, has chosen not to, according to sources, and did not comment on the matter.

OpenAI plans to engage with strategic partners like Microsoft and Apple through regular stakeholder meetings rather than board observer roles. Microsoft, which invested over$10 billion in OpenAI, cited the startup's new partnerships, innovations, and growing customer base as reasons for stepping down from the observer position.

While the EU regulators have stated that the Microsoft-OpenAI partnership does not fall under merger rules, they are reviewing exclusivity clauses in the agreement. However, British and US antitrust authorities continue to scrutinise Microsoft's influence over OpenAI. To address these concerns and diversify its AI offerings, Microsoft is expanding its AI technology on the Azure platform and has hired Inflection's CEO to lead its consumer AI division.