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EU Scrutinizes Microsoft’s Backing of OpenAI under Merger Rules

 |  January 9, 2024

The European Union’s antitrust regulators have raised concerns over Microsoft’s financial support for OpenAI, the creator of ChatGPT, stating that it may fall under EU merger rules. This announcement follows a similar caution issued by the UK regulators in December.

Microsoft, a major player in the tech industry, pledged a substantial investment exceeding $10 billion in OpenAI last year, reported Reuters.

However, the company emphasized that it holds a non-voting position on OpenAI’s board and does not possess any ownership stake in the AI development firm.

The European Commission, acting as the EU competition enforcer, released a statement confirming its examination of whether Microsoft’s investment in OpenAI warrants a review under the EU Merger Regulation. The Commission expressed a particular interest in scrutinizing agreements between prominent digital market entities and generative AI developers for their potential impact on market dynamics, refraining from disclosing the specific companies involved.

Related: Microsoft/OpenAI Relationship Could Face EU Probe

In an effort to gather insights and feedback, the Commission has extended an invitation to concerned parties to provide input on competition issues related to virtual worlds and generative artificial intelligence. The deadline for submissions is set for March 11.

Simultaneously, the EU antitrust chief, Margrethe Vestager, highlighted the Commission’s commitment to closely monitoring AI partnerships to prevent any undue distortion of market dynamics. Requests for information have been dispatched to several major digital companies to gain a comprehensive understanding of the landscape.

As the digital landscape continues to evolve, the EU remains vigilant in assessing potential competition concerns in emerging technologies, emphasizing the importance of maintaining fair market dynamics within the realm of artificial intelligence.

Source: Reuters