Microsoft’s (NASDAQ:MSFT) substantial investment in OpenAI, the creator of ChatGPT, is under scrutiny by the European Union (EU), potentially triggering a merger review, as announced by the European Commission on Tuesday.
The EU’s executive branch stated that it is currently “checking whether Microsoft’s investment in OpenAI might be reviewable” under the regulations governing mergers and acquisitions that could negatively impact competition across the 27-nation EU. This evaluation might lead to a formal investigation to determine whether the deal should be unconditionally cleared, allowed with certain concessions, or completely blocked. A similar review has already been initiated by Britain’s antitrust watchdog last month.
In the U.S., antitrust enforcers have also expressed concerns about competition in the AI industry. In November, the Federal Trade Commission approved new measures to facilitate investigations into AI products and services, acknowledging that “AI can raise competition issues in a variety of ways, including if one or just a few companies control the essential inputs or technologies that underpin AI.”
OpenAI has received multiple rounds of funding from Microsoft, including an initial $1 billion in 2019 and a substantial investment last year. The San Francisco-based startup gained significant attention globally with its generative AI chatbot, ChatGPT, which has demonstrated advanced capabilities. Generative AI systems, like ChatGPT, can produce new text, images, videos, or audio recordings based on user prompts.
The European Commission, acting as the top antitrust enforcer in the bloc, is actively seeking input from businesses and experts regarding any competition issues observed in generative AI. The commission has also approached unspecified “large digital players” for information on the matter. Additionally, it is closely monitoring AI partnerships to prevent any distortion of market dynamics, as stated by Margrethe Vestager, the EU’s antitrust enforcer, in a press release.
Vestager is scheduled to meet with OpenAI executives during her trip to the U.S. this week, along with engagements with Google CEO Sundar Pichai, Apple CEO Tim Cook, and Nvidia CEO Jensen Huang.
Featured Image: Pixabay
Author Stephanie Bédard-Châteauneuf 
