Jaab Ahrens | norphoto | Getty Images
As part of its assessment, the Commission said it wanted to understand how competitive these markets currently are and gain insight into how competition law can help these areas.
The EU Commission also said it is “looking at some of the agreements concluded between major digital market players and innovative AI developers and providers” and singled out the partnership between Microsoft and OpenAI as a particular deal it will examine.
“The European Commission is investigating whether Microsoft’s investment in OpenAI may be reviewable under the EU Merger Regulation,” the Commission said in a statement on Tuesday.
Microsoft did not immediately respond to CNBC’s request for comment.
The Commission said it had sent requests for information to “several major digital players” and was also seeking the views of interested parties, which have until March 11 to submit their responses.
“Virtual worlds and generative artificial intelligence are evolving rapidly,” Vestager said in a statement on Tuesday. “It is essential that these new markets remain competitive, and that nothing stands in the way of companies growing and delivering the best, most innovative products to consumers.”
Microsoft has poured billions of dollars into OpenAI, the company behind the popular AI-powered chatbot ChatGPT. The company has integrated some OpenAI technologies into its Office, Bing, and Windows products and supplies OpenAI with its Azure cloud computing tools.
The Redmond, Washington-based tech giant first invested in OpenAI in 2019, contributing $1 billion in cash.
The company then made headlines last year, when it reportedly pumped an additional $10 billion into OpenAI, with its total investment to date rising to $13 billion.
News of the EU review comes after the UK’s Competition and Markets Authority announced in December that it would launch an initial review of Microsoft’s investments. The US Federal Trade Commission is also reportedly evaluating the connection, according to Bloomberg News.
The CMA said it was assessing whether Microsoft’s stake in AI had created a “relevant merger situation”, citing “a number of developments in the management of OpenAI, some of which relate to Microsoft” as a major concern.
Earlier in the year, OpenAI faced a period of turmoil when its CEO Sam Altman was booted from the board in a shock move. In a dramatic turn of events, former Twitch CEO Emmett Sherr briefly took over the position, before being sacked and replaced by Altman, while the board of directors was shaken up.
As part of this update, Microsoft added its own controller to sit on the board, leading to concerns that the company may be exercising control over OpenAI. For its part, Microsoft has sought to emphasize that its appointed board observer, recently appointed Dee Templeton, is a non-voting member.
At the time of the CMA announcement, Microsoft said it had no equity ownership in OpenAI, while OpenAI said it remained independent and operated competitively.
“A non-voting board monitor does not give them governing authority or control over OpenAI’s operations,” an OpenAI spokesperson told CNBC via email in December.
“Although the details of our agreement remain confidential, it is important to note that Microsoft does not own any part of OpenAI and is simply entitled to a share of the dividends,” Frank Shaw, Microsoft’s chief communications officer, said in a statement in December. .
At the heart of the concerns is Microsoft’s close partnership and investment in OpenAI, giving the Redmond giant access to one of the most advanced developers of AI tools today. OpenAI’s large GPT-4 language model can handle a rumored 25,000 words of input text — a big step up from ChatGPT’s current limit of 4,096 characters.
Academics have said that GPT-4 has shown human-level performance in several academic tests, while some AI researchers and technologists have speculated that GPT-4 may approach artificial general intelligence, or AGI, which is supposed to be as intelligent or smarter than… artificial intelligence. Humans.
— CNBC’s Hayden Field and Kev Lesswing contributed to this report