European Commission to Probe Microsoft's 49% Stake in OpenAI
Summary:
The European Commission is set to scrutinize Microsoft's 49% stake in AI technology firm OpenAI, potentially reviewing the investment under the EU Merger Regulation. Amid managerial unrest at OpenAI, Microsoft offered CEO Sam Altman a leadership role. This scrutiny wouldn't mark Microsoft's first encounter with European monopoly laws, as its acquisition of Activision-Blizzard was delayed for nearly a year due to regulatory inquiries.
Microsoft's 49% investment in OpenAI, an AI technology firm, is poised for scrutiny under European officials. The European Commission has hinted at an examination of the transaction to ascertain if it calls for review as per EU Merger Regulation. The E.U’s online portal published documentation on Jan. 9 seeking contributions on the competition in AI and virtual reality sectors. Although it mentioned dispatching information requests to major digital entities, it stopped short of naming the entities involved. The information also confirmed an investigation into deals between dominant digital market holders and AI product developers, but did not provide specifics.
When addressing the issue of Microsoft's financial commitment to OpenAI, the commission stated, "the European Commission is checking whether Microsoft's investment in OpenAI might be reviewable under the EU Merger Regulation.” It is known that Microsoft has ploughed approximately $13 billion into OpenAI, acquiring a 49% interest. While this stake doesn't constitute a complete merger, the firing and subsequent reinstatement of OpenAI’s CEO Sam Altman, might prompt the commission's scrutiny.
According to a report from Cointelegraph, CEO Altman was sacked on November 17, 2023, due to discord within the board. After a short stint by then CTO, Mira Murati replaced by Twitch co-founder Emmett Shear, Altman was back at the helm by November 30, 2023. Amid the chaos, Microsoft proposed a top-tier role to Altman. Meanwhile, other behemoths like NVIDIA and Salesforce have been recruiting OpenAI's employees faced with walkout threats.
The speculations about European Commission reviewing Microsoft's OpenAI investment doesn't guarantee any ensuing legal implications. This wouldn't be Microsoft's debut in dealing with European merger laws. The tech giant's bid to acquire Activision-Blizzard got caught up in regulatory loop for nearly a year, entailing EU and UK governmental inquiries before the successful closure in October 2023.
Published At
1/9/2024 10:00:00 PM
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