European Union competition chief signals new artificial intelligence analysis under Microsoft-OpenAI and Google deal

LONDON (AP) — The European Union is tightening scrutiny of the artificial intelligence industry, including taking a fresh look at Microsoft’s multibillion-dollar partnership with OpenAI, a senior EU official said 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. “But we need to make sure that partnerships like this don’t become a cover for one partner gaining dominant influence over the other.”

She signaled that the commission would take a different tack to investigate the deal and the broader industry. It takes advantage of the bloc’s antitrust laws, which target abuses by companies with a dominant market position.

The commission sent requests for information to major AI players including Microsoft, Google, Facebook and TikTok in March, analysed 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 may have a negative impact on competitors,” it said.

A Microsoft spokesperson said: “We appreciate the European Commission’s thorough analysis and its conclusion that Microsoft’s investment and partnership with OpenAI do not give Microsoft control over the company. We stand 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 in global efforts to rein in big tech companies, including major players in artificial intelligence. The EU is leading the way in this area with its soon-to-enter Artificial Intelligence Law, which will be the world’s first comprehensive set of AI rules.

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 preinstall Gemini Nano on some of the South Korean tech company’s devices. Gemini Nano is the smallest version of Google’s Gemini AI foundation model.

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

The Commission is also examining the so-called “acquis-hires”, i.e. situations in which one company buys another, mainly because of its talents, as in the case of Microsoft, which hired the founder of Inflection AI, Mustafa Suleyman, and other high-ranking employees.

“We will ensure that such practices do not get out of hand under our merger control rules if they end up leading to a concentration,” she said.