Microsoft’s (NASDAQ:MSFT) substantial investment in OpenAI, the creator of ChatGPT, is under scrutiny by the European Union (EU), raising the possibility of a merger investigation, as announced by the EU’s executive branch on Tuesday.
The European Commission stated that it is currently assessing whether Microsoft’s investment in OpenAI falls under reviewable conditions as per EU regulations governing mergers and acquisitions that could negatively impact competition across the 27-nation bloc. This evaluation may lead to a formal investigation to determine if the deal should be unconditionally cleared, allowed with concessions, or potentially blocked. Notably, Britain’s antitrust watchdog initiated a similar review just last month.
In the United States, antitrust enforcers have also expressed concerns about competition within the AI industry. The Federal Trade Commission granted new investigative powers in November to more effectively assess AI products and services, acknowledging the potential competition issues arising when a few companies control essential inputs or technologies underpinning AI.
OpenAI has been a recipient of multiple funding rounds from Microsoft, including an initial $1 billion investment in 2019 and a subsequent multibillion-dollar infusion last year. The generative AI chatbot, ChatGPT, developed by OpenAI, has gained global attention for its advanced capabilities, propelling the San Francisco-based startup into the upper echelons of the AI industry.
The European Commission, acting as the EU’s top antitrust enforcer, has sought input from businesses and experts on any competition-related issues arising from generative AI. The commission, while closely monitoring AI partnerships to prevent undue market distortions, is also engaging with “several large digital players” to gather information, without specifying their identities.
Margrethe Vestager, the EU’s antitrust enforcer, is scheduled to meet with OpenAI executives during her U.S. trip this week. Additionally, meetings with key industry leaders, including Google CEO Sundar Pichai, Apple CEO Tim Cook, and Nvidia’s (NASDAQ:NVDA) CEO Jensen Huang, are on the agenda to further discuss the evolving landscape of AI and its impact on competition.
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Author Faith Yakubu 
