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Microsoft’s (NASDAQ:MSFT) $13B investment in OpenAI is expected to face more scrutiny from EU antitrust regulators, which are set to ask competitors about the AI firm’s exclusive use of Microsoft’s cloud technology, Bloomberg News reported.
Margrethe Vestager, the Bloc’s antitrust chief, is expected on Friday to rule out a probe under the EU’s merger rules. Instead, she is expected to announce that regulators are asking Microsoft’s competitors and customers more about the company’s exclusivity clauses with OpenAI, and if these could have a negative impact on competition, the report added.
Under Microsoft’s agreement with OpenAI, Microsoft’s Azure is the exclusive cloud provider for OpenAI, this is something the EU regulators want to examine more, the report noted citing people with knowledge of the matter.
Reportedly in April, the European Commission concluded that the investment does not count as a takeover since the direction of ChatGPT creator OpenAI was not controlled by Microsoft.
The EU antitrust watchdog noted in January that it was reviewing if the U.S. tech giant’s involvement with OpenAI should be vetted following a mutiny at OpenAI showed deep ties between the two companies.
Last year, OpenAI Sam Altman was removed as CEO of the AI firm which was followed by Microsoft CEO Satya Nadella advocate for his return and even offering to hire Altman, along with other employees at OpenAI who wanted to leave. Altman was eventually back at the helm of OpenAI and later Microsoft was added as a non-voting observer.
This incident led regulators to examine the agreement. The U.K. antitrust agency said it would review if the balance of power between the two companies had shifted to give one party more control or influence over the other. The U.S. Federal Trade Commission has also made inquiries into the agreement, according to the report.
At the heart of the collaboration between Microsoft and OpenAI is the computer power needed to keep generative AI services going. AI models require cloud services and processing capacity and these have seen their demand soaring amid the AI boom. For example, OpenAI has become a major customer of Microsoft’s cloud business, the report added.