EU scrutinizes Microsoft's investment in OpenAI

The European Union said Tuesday it is examining Microsoft’s multibillion-dollar investment in OpenAI, the artificial intelligence (AI) company behind the popular ChatGPT tool, and whether it is subject to the bloc's merger rules.

“The European Commission is checking whether Microsoft's investment in OpenAI might be reviewable under the EU Merger Regulation,” the EU’s executive arm said in a press release.

The disclosure came as part of calls from the European Commission on Tuesday for feedback from interested parties about “the level of competition in the context of virtual worlds and generative AI.” 

The commission also noted it is looking into already completed agreements between large digital market players and generative AI developers and providers and their impact on market dynamics.

The relationship between Microsoft and OpenAI has drawn increased scrutiny in recent months, following the high-profile ouster and return of OpenAI co-founder and CEO Sam Altman.

Just days after Altman was ousted by OpenAI’s board of directors in November, Microsoft announced it was hiring him to lead a new AI research team. 

However, after hundreds of OpenAI employees threatened to quit, Altman was quickly brought back to lead the AI company. Several days later, OpenAI announced Microsoft would have a nonvoting position on the company’s board. 

In early December, the United Kingdom’s Competition and Markets similarly announced it was launching an initial review of Microsoft’s partnership with OpenAI and whether it has “resulted in a relevant merger situation.”