Microsoft Corp.’s partnership with OpenAI could face an antitrust probe in the European Union, the bloc’s top competition official has revealed.

European Commission Executive Vice President Margrethe Vestager detailed the potential investigation in a speech today. She disclosed that officials had sent Microsoft and OpenAI a set of questions about “certain exclusivity clauses” in their partnership agreement. According to the Financial Times, the concern is that those clauses may harm competitors in the artificial intelligence market.

“The commercialisation of AI and its powerful tools is going to be led by a few companies that already have a lot of market power,” Vestager said. “So we remain vigilant.”

Microsoft agreed to provide OpenAI with $10 billion in capital and cloud infrastructure last January. Under the terms of the investment, Microsoft will reportedly receive 75% of OpenAI’s profit until recouping the investment. Afterwards, it will take a 49% stake in the ChatGPT developer.

Vestager detailed today that the European Commission had considered investigating whether the deal broke merger laws. “The key question was whether Microsoft had acquired control on a lasting basis over OpenAI,” she said. “After a thorough review we concluded that such was not the case.” This finding is what led officials to shift their focus to the exclusivity clauses in the companies’ partnership agreement.

Vestager said that the European Commission is also reviewing the impact of “acqui-hires” on the AI market. In March, Microsoft hired most of the employees at OpenAI competitor Inflection AI Inc. as part of a transaction reportedly worth $650 million. Microsoft also agreed to license the startup’s large language models.

The Inflection AI deal is reportedly also drawing antitrust scrutiny in the U.S. Earlier this month, the Wall Street Journal cited sources as saying that the Federal Trade Commission is reviewing the transaction. The FTC reportedly hopes to determine whether Microsoft structured the deal in a manner designed to give it control over Inflection AI without drawing regulatory scrutiny.

“We stand ready to respond to any additional questions the European Commission may have,” a Microsoft spokesperson told the Financial Times. 

Separately, the EU is evaluating whether tech giants may be making it difficult for emerging AI developers to reach users. As part of that review, antitrust officials are looking into a partnership that Samsung Electronics Co. Ltd. inked with Google LLC in January. The collaboration saw the handset maker integrate several of Google’s AI models into its Android device lineup. 

The European Commission is scrutinizing Samsung’s use of Gemini Nano, a lightweight version of Google’s flagship Gemini LLM. The model powers some of the text generation features in the handset maker’s flagship Galaxy S24 smartphone series. Samsung is expected to ship a new, more capable version of Gemini Nano with its upcoming Galaxy S25 devices. 

Photo: Microsoft