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Key Takeaways
- The European Union (EU) reportedly determined not to pursue a formal competition probe into Microsoft’s investments in OpenAI, which could ease investor worries about government action forcing the pair to weaken ties.
- Microsoft’s OpenAI investment is expected to avoid a formal investigation as it doesn’t meet the standards for the process, Bloomberg reported Wednesday.
- The EU had launched a preliminary investigation into Microsoft’s OpenAI investments in January.
- The report comes as government agencies including the U.K.’s Competition and Markets Authority and the Federal Trade Commission in the U.S. raise similar concerns.
The European Union (EU) reportedly decided not to pursue a formal probe into Microsoft’s (MSFT) investments in OpenAI, which could ease concerns that regulatory action could force the pair to weaken ties, as the governments consider big tech companies’ artificial intelligence (AI) partnerships and the impacts on competition.
Microsoft’s OpenAI investment is expected to avoid a formal EU investigation as it doesn’t meet the standards for the process, Bloomberg reported Wednesday citing people familiar with the matter.
Microsoft declined to comment and the EU Commission did not immediately respond to Investopedia’s request for a statement.
The European Commission had launched an investigation into the impacts of agreements between large AI players and their impact on the market and competition on Jan. 9 and named Microsoft’s investment in OpenAI in the release. The EU later said that Microsoft’s investment in French AI startup Mistral AI would be considered as well.
Microsoft’s partnership with OpenAI is a key one for the tech giant and has helped it position itself as an early leader in the AI era. Wedbush analysts recently said they “believe Redmond is just starting to hit its next gear of growth with ChatGPT and AI also adding a new layer of growth to the MSFT story over the coming years.”
However, Microsoft’s OpenAI partnership also attracted scrutiny from the Competition and Markets Authority (CMA) in the U.K. at the end of 2023 and the Federal Trade Commission (FTC) in the U.S. in January of 2024, raising concerns that OpenAI and Microsoft could face pressure to weaken their ties.
Microsoft shares were down 0.7% at $411.61 around 3 p.m. ET Wednesday. The company’s stock has gained about 11% since the start of 2024.