EU Considers Scrutinizing Microsoft's Investment in OpenAI under Merger Rules

According to Microsoft, its partnership with OpenAI, established in 2019, has resulted in increased innovation and competition in the AI sphere while maintaining independence for both companies.

EU Considers Scrutinizing Microsoft's Investment in OpenAI under Merger Rules
Photo by Kim Menikh / Unsplash

The European Union's antitrust regulators have announced that Microsoft's substantial financial backing for OpenAI, the developer of ChatGPT, might fall under the purview of EU merger regulations. This announcement follows a similar caution issued by the UK authorities in December regarding Microsoft's involvement with OpenAI.

While Microsoft pledged to invest more than $10 billion in OpenAI last year, it emphasized that it holds a non-voting position on OpenAI's board and does not have ownership over any portion of OpenAI.

The European Commission, acting as the EU competition regulator, stated that it is currently assessing whether Microsoft's investment in OpenAI could be subject to review under the EU Merger Regulation.

The Commission also revealed that it is scrutinizing certain agreements struck between major digital market players and generative AI developers and providers to examine their effects on market dynamics. However, specific companies involved were not disclosed.

Furthermore, the EU antitrust division extended an invitation until March 11 for interested parties to provide their input regarding competition within virtual worlds and generative artificial intelligence. Additionally, requests for information were sent to several major digital firms regarding these two topics.

Margrethe Vestager, the EU's antitrust chief, emphasized the need to monitor AI partnerships closely to prevent undue distortions in market dynamics. She called for businesses and experts to highlight any potential competition concerns in these sectors to ensure fair market practices.