Microsoft's OpenAI Investment Could Face EU Probe -- 2nd Update
January 09 2024 - 11:30AM
Dow Jones News
By Mauro Orru
The European Union is considering whether to launch a review of
Microsoft's investment in ChatGPT maker OpenAI under the bloc's
merger regulations, a month after the U.K. said it was also
weighing whether the tech partnership could have an impact on
competition.
The European Commission, the EU's executive arm, made the
disclosure on Tuesday as it sought input from interested parties on
the level of competition in virtual worlds and generative
artificial intelligence, and feedback on what competition law can
do to keep these new markets competitive.
"The European Commission is checking whether Microsoft's
investment in OpenAI might be reviewable under the EU Merger
Regulation," the commission said.
Last month, Britain's Competition and Markets Authority said it
was seeking feedback on whether the Microsoft-OpenAI partnership
should be considered a de facto merger, in a preliminary step that
could lead to a formal investigation.
The two regulatory moves in Europe come in the wake of the
abrupt firing and reinstatement of OpenAI Chief Executive Sam
Altman late last year, along with the formation of a new board. In
the boardroom shake-up, Microsoft gained a non-voting observer
position.
Microsoft said that, since 2019, its partnership with OpenAI had
fostered more AI innovation and competition, while preserving
independence for both companies. "The only thing that has changed
recently is that Microsoft will now have a non-voting observer on
OpenAI's board," a Microsoft spokesperson said.
OpenAI didn't respond to a request for comment.
OpenAI started gaining traction in late 2022 after the release
of its ChatGPT chatbot. Microsoft entered the picture as a major
partner for OpenAI, agreeing to invest $13 billion in the company
in exchange for what is essentially a 49% stake in the earnings of
its for-profit arm.
The EU is asking for feedback from interested parties by March
11.
Write to Mauro Orru at mauro.orru@wsj.com
(END) Dow Jones Newswires
January 09, 2024 12:15 ET (17:15 GMT)
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