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STORY: Microsoft has given up its board observer seat at OpenAI.

The firm said it wasn't needed as the start-up's governance had improved over the past eight months.

Microsoft took up the role last year when OpenAI CEO Sam Altman returned to the company after being pushed out.

It allowed Microsoft to attend board meetings and access confidential information.

But it gave the company no voting rights on matters including electing and choosing directors.

Microsoft's involvement, and its $10 billion investment in the ChatGPT developer, had caused unease among antitrust watchdogs concerned about how much control it had over OpenAI.

EU regulators said last month the partnership wouldn't be subjected to the bloc's merger rules as the tech giant didn't control OpenAI.

But British and U.S. authorities still have concerns about Microsoft's influence on OpenAI.

However, the two companies are increasingly competing to sell AI technology to enterprise customers.

They aim to generate revenue and show their independence to regulators.

Microsoft also expanded its offerings and made a major hire to lead its consumer AI division.

The moves are widely seen as an effort to diversify from OpenAI.

Microsoft rival Apple also announced last month it would bring ChatGPT to its devices.

The Financial Times reported it would not take Microsoft's observer role on OpenAI's board after being widely expected to do so.