European Union competition chief signals new artificial intelligence analysis as part of Microsoft-OpenAI and Google deal

The European Union is stepping up scrutiny of the artificial intelligence industry, including taking a fresh look at Microsoft’s multibillion-dollar partnership with OpenAI, a top EU official said on Friday.

The European Commission, the bloc’s executive arm, began a review of the deal last year to see if it broke EU merger rules, but abandoned it after finding that Microsoft had not taken control of OpenAI, Margrethe Vestager, the commission’s executive vice-president for competition policy , he said in a speech.

“Microsoft has invested $13 billion in OpenAI over the years,” she said. “However, we must ensure that partnerships such as this do not become a cover for one partner gaining dominant influence over the other.”

She signaled the commission would take a different tack to investigate the deal and the broader industry. It is using the bloc’s antitrust rules, which target abuses by companies with dominant market positions.

(To receive the top tech news of the day, sign up for our Today’s Cache technology newsletter)

The commission sent requests for information in March to big players in the artificial intelligence market, including Microsoft, Google, Facebook and TikTok, analyzed the responses and “is now sending another request for information on the agreement between Microsoft and OpenAI,” Vestager said.

The EU wants to “understand whether certain exclusivity clauses could have a negative impact on competitors,” she said.

A Microsoft spokesperson said: “We appreciate the European Commission’s thorough analysis and its conclusion that Microsoft’s investment and partnership with OpenAI does not give Microsoft control over the company. We are ready to answer any additional questions the European Commission may have.”

“We support the Commission’s goal of keeping the AI ​​industry competitive and innovative, and we look forward to continuing our constructive dialogue,” OpenAI said in a statement, adding that it welcomed the conclusions of the investigation.

The increased scrutiny has highlighted how European Union regulators have set the pace for a global effort to rein in big tech companies, including major players in AI. The EU is leading the way with its AI Act, which will soon become law and will be the world’s first comprehensive set of rules on AI.

Vestager said the bloc is also concerned about consumer choice in foundation models, the technology that underpins generative artificial intelligence systems such as chatbots.

She said EU regulators sent requests for information “to better understand the implications of Google’s agreement with Samsung” to pre-install Gemini Nano on some of the South Korean tech company’s devices. Gemini Nano is the smallest version of Google’s entry-level Gemini AI model.

“We also have a number of other preliminary antitrust investigations underway into various practices in AI-related markets,” she added.

The commission is also looking into so-called “acquis-hires,” or situations in which one company buys another mainly for its talent, as in the case of Microsoft, which hired Inflection AI founder Mustafa Suleyman and other high-ranking employees.

“We will make sure that these practices do not slip through our merger control rules if they essentially lead to concentration,” she said.