In a major shift that is creating a lot of turmoil in the AI space, Microsoft is now opting out from its board observer position at OpenAI. This decision comes at a time when regulatory authorities are increasingly targeting the tech giants and therefore represents a turning point in their relationship.

The Microsoft-OpenAI Partnership: Brief History

The series of investments by Microsoft, especially in OpenAI raising over $10 billion has revolutionized the future of AI. Their collaboration started in 2019 and it resulted in innovations such as the ChatGPT that attracted over one hundred million users in less than two months of its release. Such partnership has significantly contributed to the advancement of this AI technology.

Legal Environment And Market Effect

The observer seat that the San Francisco-based tech obtained in November 2023 after Sam Altman rejoined OpenAI as the CEO brought attention from antitrust regulators across the world. EU regulators didn’t analysis the partnership as a merger, but they got third party opinion on exclusivity clauses. The UK’s Competition and Markets Authority and the US Federal Trade Commission remain concerned about Microsoft’s control over OpenAI.

Microsoft’s Strategic Shift

Microsoft has stated that it no longer wants an observer status because of OpenAI’s enhanced supervision and vast advancement. This could in a way help to eradicate some of the major regulatory issues. Notably, Apple, which is reported to be harboring such intentions, has said to have left the idea in what financial times sources described as ‘the bin’.

Competition And Independence

Microsoft and OpenAI are both doubling down on efforts to monetize AI technology for business consumption. In the second quarter of 2023, the customer base for Microsoft’s Azure AI-related services has risen by 140 percent as it did in the second quarter of 2022. On the other hand, OpenAI API has been integrated and used by more than 80 percent of the firms under the Fortune 500 list. Such a relationship with competitors reveals the desire of both companies to be independent and control the market.


Hikes in the artificial intelligence race make Microsoft take a pause while stepping down from the OpenAI’s board indicate a new chapter in the organizations’ relationship. This can alter the competition and the nature of the government’s and regulators’ attitude to AI partnerships. The industry is keenly observing how these technology giants address the challenges and legal requirements for growth, rivalry, and risk management, in the modern advanced AI environment.

Key Takeaways

  1. Microsoft’s move is a clear signal that alters AI industry trends.
  2. This element continues to have a key role in determining AI partnerships because of the regulation’s impact.
  3. The change may assist in responding to antitrust questions and prove that OpenAI does not belong to the complex.
  4. Both companies are increasing their strategic efforts towards AI solutions for businesses.