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

KELVIN CHAN, Associated Press

11 hours ago

FILE – The OpenAI logo is displayed on a cellphone with an image on a computer monitor generated by ChatGPT’s Dall-E text-to-image model, Dec. 8, 2023, in Boston. The European Union is stepping up scrutiny of the artificial intelligence industry, including a fresh look at Microsoft’s multibillion-dollar partnership with OpenAI. The bloc began reviewing the multibillion-dollar deal last year to see if it violated EU merger rules, but withdrew from it after concluding that Microsoft had failed to gain control of OpenAI. (AP Photo/Michael Dwyer, File)

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 would use the bloc’s antitrust rules, which target abuses by companies with dominant market positions.

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 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 does 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 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 choices around core models, the technology that underlies generative artificial intelligence systems such as chatbots.

She said EU regulators sent requests for information “to better understand the impact 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 the basic Google 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.