Microsoft’s 49% ownership stake in OpenAI, the creator of ChatGPT, may soon face scrutiny in Europe. The European Commission has indicated its intention to investigate whether Microsoft’s investments in the AI company should be subject to review under EU Merger Regulation.
In a document released on January 9 on the European Union’s website, the commission called for contributions regarding competition in “virtual worlds” and AI. It also mentioned that it had issued “information requests to several major digital players,” without specifying the names of these companies, organizations, or individuals.
The commission also mentioned that it was examining certain agreements made between significant players in the digital market and generative AI developers and providers, though it did not specify the companies under investigation.
Regarding the Microsoft and OpenAI situation, the commission was clear:
“Lastly, the European Commission is assessing whether Microsoft’s investment in OpenAI might be subject to review under EU Merger Regulation.”
Microsoft has reportedly invested a minimum of $13 billion in OpenAI for a 49% ownership stake in the company. While this ownership level falls just short of meeting the dictionary definition of a full merger, the commission might consider Microsoft’s recent involvement in the events surrounding the CEO change at OpenAI, involving Sam Altman, as a potential factor to examine. As previously reported by Cointelegraph, Altman was dismissed on November 17, 2023, amid tensions with at least one board member. He was subsequently rehired after a series of CEO changes, including Mira Murati briefly taking over as CEO before being replaced by Twitch co-founder Emmett Shear. However, by November 30, 2023, Shear also stepped down, leading to Altman’s return.
In the midst of these developments, Microsoft offered Altman a leadership position. It’s important to note that the European Commission’s consideration of reviewing Microsoft’s investments in OpenAI does not guarantee any regulatory or legal action. This would not be the first time Microsoft has dealt with European merger regulations.
Microsoft’s acquisition of gaming giant Activision-Blizzard faced significant delays as the company underwent inquiries and worked to address requests from both the EU and UK governments. Ultimately, the acquisition was successfully completed in October 2023.
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