Microsoft Corp’s $13 billion investment into OpenAI Inc is facing the potential of a full-blown European Union merger probe, after a mutiny at the ChatGPT creator laid bare deep ties between the two companies.
The European Commission said on Tuesday that it’s examining whether Microsoft’s investment in OpenAI might be reviewable under the bloc’s merger rules. If found to reach the necessary conditions, regulators may start a formal probe into whether the arrangement should be allowed. The EU move follows a similar step by the UK’s Competition and Markets Authority.
Microsoft has benefited richly from its investments, totaling as much as $13 billion, in OpenAI. By integrating OpenAI’s products into virtually every corner of its core businesses, the software giant very quickly established itself as the undisputed leader of AI among big tech firms. Rival Alphabet Inc’s Google has been racing to catch up ever since.
The recent firing — and subsequent rehiring — of Sam Altman as chief of OpenAI exposed how inextricably linked the two companies have become. Microsoft shares fell immediately after OpenAI’s board ousted Altman. Microsoft chief executive officer Satya Nadella personally helped negotiate and advocate for his return to the company — at one point offering to hire Altman himself, along with other employees at OpenAI who wanted to leave.
On Tuesday, the EU’s antitrust enforcers also announced a call for feedback on competitive issues that may arise in the field of generative artificial intelligence and virtual worlds.
“We are inviting businesses and experts to tell us about any competition issues that they may perceive in these industries, whilst also closely monitoring AI partnerships to ensure they do not unduly distort market dynamics,” a statement from Margrethe Vestager, the EU’s competition commissioner, read.
The Brussels-based commission added that venture capital investment in AI in the EU is estimated at more than 7.2 billion euros in 2023 and the size of the virtual worlds market in Europe is estimated to have reached more than 11 billion euros in 2023. The exponential growth is likely to have a major impact on how businesses compete, the commission said.
Also Read: OpenAI addresses the New York Times lawsuit, claiming that it is 'not telling the full story'
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