EU investigation does not include Microsoft-OpenAI deal, but other regions to scrutinize transaction

According to sources familiar with the matter, EU antitrust regulators have determined that Microsoft’s $13 billion investment in OpenAI does not constitute an acquisition. This decision means that the deal will not be subject to a formal European investigation, potentially sparing the U.S. tech giant from facing significant remedies.

EU regulators had said in January that the deal could involve the region’s merger rules. Microsoft, which has no voting rights on the OpenAI board, said late last year that it owned no part of the ChatGPT maker.

But Microsoft isn’t out of the woods yet, as the EU’s competition authority continues to investigate partnerships between major digital market players and developers and providers of generative artificial intelligence, which could lead to disruptive and lengthy investigations into their market power.

“The Commission had been monitoring OpenAI’s supervisory situation very closely before the recent events involving its management,” an EU spokesman said in an email to Reuters.

“We are checking whether Microsoft’s investment in OpenAI can be reviewed under the EU merger regulation.”

Microsoft declined to comment, while OpenAI did not immediately respond to Reuters requests for comment.

The Microsoft-OpenAI partnership is also under informal scrutiny in other areas.

Britain’s Competition and Markets Authority is considering launching an investigation into whether the deal affects competition between British companies, while the US Department of Justice and the Federal Trade Commission are said to be considering investigations.

To avoid such investigations, Microsoft is actively seeking partnerships with other AI companies. Earlier this year, it announced a deal with French startup Mistral AI.

Bloomberg News first reported the development on Wednesday.