EU to Check Whether Microsoft’s Investment in OpenAI Falls Under Merger Rules

EU to Check Whether , Microsoft’s Investment in OpenAI , Falls Under Merger Rules.

On January 9, the European Union announced an investigation to determine if Microsoft's massive investment in OpenAI violates the bloc's merger regulations.

On January 9, the European Union announced an investigation to determine if Microsoft's massive investment in OpenAI violates the bloc's merger regulations.

TechCrunch reports that the news comes after turmoil at OpenAI which saw the board of directors oust the company's founder and CEO, Sam Altman.

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TechCrunch reports that the news comes after turmoil at OpenAI which saw the board of directors oust the company's founder and CEO, Sam Altman.

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The surprising decision triggered an aggressive response by Microsoft, which offered to hire Altman and any other OpenAI staffers looking to leave the generative AI company.

The surprising decision triggered an aggressive response by Microsoft, which offered to hire Altman and any other OpenAI staffers looking to leave the generative AI company.

Ultimately, OpenAI reversed the board's initial decision, bringing Altman back to lead the company.

A new board was then formed, which saw the departure of members who had voted in favor of removing Altman.

A new board was then formed, which saw the departure of members who had voted in favor of removing Altman.

The new board also includes Microsoft representation for the first time in the form of a non-voting, observer member.

TechCrunch reports that the high-profile upheaval, combined with Microsoft's major 49% stake in OpenAI, has garnered the attention of regulators.

At the close of 2023, the Competition and Markets Authority launched an investigation aimed at deciding if OpenAI and Microsoft are in a , "relevant merger situation.".

Last fall, Germany's Federal Cartel Office (FCO) concluded that the business arrangement was not "currently" subject to merger control.

If Microsoft were to increase its influence on OpenAI in the future, it would have to be re-examined whether a notification obligation exists under competition law, Germany's Federal Cartel Office (FCO), via TechCrunch