European Union competition chief signals new scrutiny of AI amid Microsoft-OpenAI and Google deal

LONDON (AP) — 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 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 concluding that Microsoft had not taken control of OpenAI, Margrethe Vestager, the commission’s executive vice-president for competition policy, 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 that the commission would take a different tack to investigate the deal and the broader industry. It would use the bloc’s antitrust rules, which target abuses by companies with dominant market positions.

The commission sent requests for information to big AI players including Microsoft, Google, Facebook and TikTok in March, reviewed those responses and “is currently issuing 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,” 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 stand ready to answer any additional questions the European Commission may have.”

OpenAI did not immediately respond to a request for comment.

The increased scrutiny underscores how European Union regulators have led the global push to rein in the power of big tech companies, including major AI players. The EU has led the way with the soon-to-be-enacted AI Act, the world’s first comprehensive set of AI rules.

Vestager said the bloc is also concerned about consumer choices regarding core models, or the technology underpinning generative AI 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 are also conducting a number of other preliminary antitrust investigations into various practices in AI-related markets,” she added.

The committee also investigates so-called “acquisitions,” in which a company buys another largely for its talent, such as Microsoft’s hiring of Inflection AI founder Mustafa Suleyman and other top employees.

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

Kelvin Chan, Associated Press