The European Union is contemplating a review of Microsoft’s investment in OpenAI, the creator of ChatGPT, under the bloc’s merger regulations. This consideration follows a similar move by the U.K. a month ago, where regulators are exploring whether the tech collaboration might impact competition in the market.
The European Commission, the executive arm of the EU, announced last week that it is assessing whether Microsoft’s investment in OpenAI falls within the scope of the EU Merger Regulation. Seeking input from stakeholders, the Commission is particularly interested in understanding the competitive landscape in virtual worlds and generative artificial intelligence, and how competition law can effectively regulate these emerging markets.
“The European Commission is checking whether Microsoft’s investment in OpenAI might be reviewable under the EU Merger Regulation,” the commission said.
Last month, the U.K.’s Competition and Markets Authority initiated a feedback-seeking process to determine if the Microsoft-OpenAI partnership should be treated as a de facto merger, potentially leading to a formal investigation.
These regulatory actions in Europe coincide with the notable events surrounding OpenAI, including the abrupt firing and subsequent reinstatement of CEO Sam Altman late last year, along with a restructuring of the board that granted Microsoft a non-voting observer position.
Microsoft defended its collaboration with OpenAI, emphasizing that since 2019, the partnership has driven AI innovation and competition while maintaining independence for both entities. A Microsoft spokesperson noted that the recent change involves Microsoft holding a non-voting observer position on OpenAI’s board.
The EU has invited feedback from interested parties until March 11 as part of its assessment process.