Global regulations

Microsoft’s $13B OpenAI deal escapes EU probe

Microsoft's partnership with OpenAI–which has been under scrutiny for causing unfair competition and AI market dominance–has been cleared by the EU

Martin Crowley
April 18, 2024

Why the EU was considering a formal investigation into Microsoft's OpenAI partnership

As part of its ongoing investigations into agreements between large AI players and their impact on the market and competition companies, in January,  EU antitrust regulators announced they were looking into Microsoft's multi-billion dollar deal with OpenAI, concerned that it could cause unfair market dominance and competition if the deal was, in fact, a merger.

Last year, Microsoft–which has a non-voting position on OpenAI’s board–declared that it didn’t own any part of OpenAI, although it did have exclusive licenses to GPT-4 and other OpenAI models.

Why the EU has decided not to proceed with a formal investigation

After looking into the partnership in more detail, EU regulators have now stated that the deal didn’t meet the standards for a formal investigation, establishing that it “first needs to conclude that there has been a change of control on a lasting basis” before opening a formal investigation, easing investor concerns about government action forcing the two companies to weaken its ties.

Are future antitrust investigations on the horizon for Microsoft?

In an attempt to avoid any further regulatory scrutiny, Microsoft is actively seeking new partnerships with other AI companies and has recently announced a multi-year partnership with the French AI start-up, Mistral. Although, the EU Commission has announced that it will be analyzing this agreement, too, suggesting it could lead to a formal investigation.

And, with the US Justice Department, the Federal Trade Commission, and the UK's Competition and Markets Authority all also considering an investigation into the same partnership, Microsoft isn’t out of the woods yet.