EU says it may review Microsoft’s investments in OpenAI under merger regulations

The E.U. is looking for input on the state of competition in virtual worlds and artificial intelligence (AI) ahead of the potential probe.

Microsoft’s 49% stake in ChatGPT maker OpenAI may soon come under scrutiny in Europe. The European Commission has signaled its intent to investigate whether the Redmond company’s investments in the AI firm deserve review under the EU Merger Regulation.

In a document published on the E.U.’s website on Jan. 9, the commission announced a call for contributions concerning competition in “virtual worlds” and AI. It also stated that it’d sent “requests for information to several large digital players,” though it didn’t specify what companies, organizations, or individuals were contacted.

The commission also asserted that it was “looking into some of the agreements that have been concluded between large digital market players and generative AI developers and providers” without specifying which companies were under review.

On the subject of Microsoft and OpenAI, however, the commission was clear:

“Finally, the European Commission is checking whether Microsoft’s investment in OpenAI might be reviewable under the EU Merger Regulation.”

Microsoft has reportedly invested at least $13 billion in OpenAI for a 49% stake in the firm. While this level of equity falls just short of a full merger under the dictionary definition, it’s possible the commission could consider Microsoft’s recent involvement in OpenAI’s firing and subsequent rehiring of CEO Sam Altman as an indicating factor.

❤️ https://t.co/9JnRmJMptH

— Sam Altman (@sama) November 30, 2023

As Cointelegraph reported, Altman was fired on November 17, 2023 amid tensions between himself and at least one member of the company’s board. He was then rehired after a CEO-shuffle saw then company CTO Mira Murati take the helm briefly before being replaced just days later by Twitch cofounder Emmett Shear. However, by November 30, 2023, Shear was out again as the company welcomed Altman back to his former position.

Amidst the turmoil, Microsoft stepped in to offer Altman a leadership position.

Related: Microsoft, Salesforce, Nvidia swoop in to hire OpenAI employees as walkout threats increase

The European Commission’s threat to review Microsoft’s investments in OpenAI don’t necessarily mean that any regulation or legal action will occur. And this certainly wouldn’t be the Redmond company’s first brush with European merger law.

Microsoft’s acquisition of gaming giant Activision-Blizzard was held up for the better part of a year as the company faced inquiries and sought to implement requests from both the E.U. and U.K. governments. Ultimately, the takeover was successfully completed in October 2023.