IT Home News on January 9, the European Commission announced today that it is reviewing Microsoft's investment in generative artificial intelligence giant OpenAI to determine whether it needs to be reviewed under EU merger regulations.
IT House previously reported that there was unrest within OpenAI at the end of November last year, when the board voted to remove founder and CEO Sam Altman, triggering a fierce counterattack from Microsoft, which not only hired Altman, but also extended an invitation to any employee who wanted to leave OpenAI during the leadership turmoil.
Eventually, Altman returned to OpenAI's leadership role, and the board of directors was reshuffled, with some members of the board who voted to remove him from his position. Notably, Microsoft also entered the board as a non-voting observer for the first time.
This development, coupled with Microsoft's continued investment in OpenAI (Microsoft is a major investor in OpenAI, holding a 49% stake in the nonprofit OpenAI entity, which is controlled by the board of directors) appears to have attracted the interest of competition regulators.
Last month, the UK's Competition and Markets Authority (CMA) launched an investigation to determine whether there is a "merger-related situation" for the tech giants. The deadline for comment is 3 January, but the review process is still ongoing.
At the same time, the German Federal Cartel Office (FCO) also reviewed the relationship between the two companies. Last fall, just a few weeks before Altman was ousted, the "collaboration" between OpenAI and Microsoft is currently not subject to merger controls. But it also warned: "If Microsoft increases its impact on OpenAI in the future, it will have to re-examine whether there is a notification obligation under competition law." ”
The European Commission today announced its focus on the collaboration between OpenAI and Microsoft, along with two requests for competition (RFI), one on generative AI and the other on virtual worlds, with the aim of raising awareness of these frontier markets.
The European Commission said it was inviting stakeholders to comment on "the level of competition in the context of virtual worlds and generative AI and their insights on how competition law can help ensure that these new markets remain competitive". The deadline for comments is 11 March.
The committee also said it was "investigating agreements between some large digital market players and generative AI developers and providers," saying it was "investigating the impact of these partnerships on market dynamics." Finally, the European Commission is examining whether Microsoft's investment in OpenAI could be subject to review under EU merger rules.