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EU Drops Antitrust Probe into Microsoft and OpenAI, Citing Cooperation Instead of Acquisition

TraderKnows
TraderKnows
04-18

In January, the EU antitrust body investigated if Microsoft and OpenAI's collaboration was monopolistic. Recently, they concluded it's a partnership, not a takeover, and not monopolistic.

Recently, insiders revealed that the European Commission has abandoned its antitrust investigation into Microsoft and OpenAI, deciding not to formally investigate the partnership since it does not constitute a merger or acquisition, and Microsoft does not control OpenAI's development direction. The collaboration is considered a normal business activity rather than a monopoly.

In January, the European Union's antitrust authorities publicly stated they would investigate the partnership, which could have led to the termination of the collaboration. Therefore, many investors and institutions were pessimistic about the partnership's prospects. Although antitrust bodies usually do not veto such collaborations, a discovery of issues could have serious consequences.

Microsoft has consistently refrained from commenting on this matter but has indirectly addressed the skepticism regarding the partnership. Microsoft claims that its collaboration with OpenAI has fostered more artificial intelligence innovation and competition, while also maintaining the independence of both companies. This response is, in essence, an answer to the antitrust investigation, insisting that the partnership does not constitute a monopoly or harm to the industry.

Microsoft has been investing widely in AI-related companies in recent years, with OpenAI being one of its major clients and partners. The investment in OpenAI has caught the attention of regulatory bodies in the European Union, the United Kingdom, and the United States, focusing on whether the investment has fundamentally changed the balance of power between the two entities, potentially giving one side control and dominance.

Currently, the European Union views this investment as part of the potential monopoly risks in the next generation of AI technology, hence the suspension of the investigation into the partnership. However, the investigation may be resumed depending on future developments.

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