The European Commission has signaled its intention to investigate whether Microsoft's 49% stake in OpenAI warrants review under the EU Merger Regulation. The commission published a document calling for contributions on competition in virtual worlds and AI, mentioning inquiries into agreements between digital market players and generative AI developers. While not specifying the companies under review, the document explicitly stated that the European Commission is checking whether Microsoft's investment in OpenAI might be reviewable under the EU Merger Regulation. Microsoft's significant investment in OpenAI, estimated at at least $13 billion for a 49% stake, could face regulatory scrutiny.


Key Points:

  • European Commission's Investigation: The European Commission has initiated an investigation into competition in virtual worlds and AI, along with agreements between digital market players and generative AI developers. The commission explicitly mentioned reviewing Microsoft's investment in OpenAI under the EU Merger Regulation.

  • Microsoft's Stake in OpenAI: Microsoft holds a 49% stake in OpenAI, having invested at least $13 billion in the AI firm. The commission is considering whether this investment warrants a review under the EU Merger Regulation.

  • Potential Merger Review: The EU Merger Regulation may come into play as the commission assesses the nature and implications of Microsoft's investment in OpenAI. The investigation aims to determine whether the investment meets the criteria for a reviewable merger under EU regulations.

  • OpenAI Leadership Changes: The investigation follows leadership changes at OpenAI, including the firing and subsequent rehiring of CEO Sam Altman. The dynamics within OpenAI and Microsoft's involvement could be factors considered in the regulatory review.

  • Microsoft's Previous Regulatory Challenges: Microsoft has previously navigated European regulatory scrutiny, particularly with its acquisition of gaming giant Activision-Blizzard. The completion of the takeover faced inquiries and compliance with requests from the EU and U.K. governments.

Conclusion: The European Commission's announcement of an investigation into Microsoft's investment in OpenAI, particularly under the EU Merger Regulation, raises questions about potential regulatory scrutiny. The significant stake held by Microsoft in OpenAI and recent leadership changes within the AI firm may be factors considered in the review. Microsoft's history of addressing regulatory challenges, such as the Activision-Blizzard acquisition, adds context to the potential outcomes of the investigation. The investigation will shape how the EU views the relationship between major tech players and AI developers, influencing future regulations and considerations in the digital landscape.


(TRISTAN GREENE, COINTELEGRAPH, 2023)