The growing relationship between tech giant Microsoft and OpenAI has led to calls for an investigation on potential competitive impact within the AI sector. Several civil society and human rights groups, including Article 19, have asked the European Commission to investigate the relationship under EU Merger Regulation. The European Commission stated it would examine the partnership further to see if it calls for a formal review.
Similar to the US Federal Trade Commission, the European Commission’s probe aims to ensure business mergers and investments do not hinder competition within the European Economic Area. The UK’s Competition and Markets Authority is also looking into the partnership, due to concerns that Microsoft might have overstepped with its involvement.
Several organizations, including the Irish Council for Civil Liberties and the Mozilla Foundation, note that Microsoft’s investment in OpenAI has reached around $10 billion, which could give the company significant influence over OpenAI’s operations and strategy.
In 2019, OpenAI shifted from being an open-source oriented start-up to a capped for-profit company, drawing in Microsoft’s initial $1 billion investment. Despite Microsoft’s claims that their investments do not provide control over OpenAI, their influence on OpenAI’s decision-making and strategic direction has been noted.
Elon Musk, a co-founder of OpenAI, has pointed out that OpenAI, initially a non-profit company acting as a counterweight to Google, has now become significantly controlled by Microsoft.
As the companies’ relationship developed, OpenAI shifted from its original open-source principles and Microsoft began using its tools. This partnership is one reason behind Microsoft’s soaring revenue, exemplifying the dominant interaction within the generative AI industry.
However, concerns have arisen that the partnership could undermine principles of fair competition and hinder innovation in the AI field. The potential for preferential access to OpenAI’s technologies could offer Microsoft an unfair advantage, possibly strengthening its position in the AI market at the expense of smaller competitors.
With these concerns in mind, regulatory bodies, notably the European Commission’s Directorate-General for Competition, are urged to thoroughly investigate the partnership. In the US, the FTC is also probing relationships between major AI start-ups and tech giants.
