Microsoft and OpenAI's $13B Deal to Face Extra EU Scrutiny

TapTechNews June 28th news, Microsoft's $13 billion (currently about 94.701 billion yuan) deal with OpenAI will face additional EU review, and the EU is preparing to query competitors about OpenAI's exclusive use of Microsoft's cloud technology exclusivity agreement.

TapTechNews note: According to the terms of the agreement reached between Microsoft and OpenAI, Microsoft Azure is the exclusive cloud service provider of OpenAI. Insiders revealed that the EU regulatory agency hopes to conduct more reviews on this.

The European Commission's Competition Commissioner Margarete Vestager announced on Friday that it would not launch a formal investigation into the deal according to the EU merger regulations. Instead, the regulatory agency will query Microsoft's competitors and customers about the exclusive agreement terms between Microsoft and OpenAI, and whether these terms will have a negative impact on market competition.

In 2019, OpenAI signed a $1 billion (TapTechNews note: currently about 7.285 billion yuan) cooperation agreement with Microsoft, and the two sides will jointly develop artificial intelligence technology. According to the terms of the agreement reached between Microsoft and OpenAI, Microsoft will provide cloud computing and AI tool support for OpenAI, and Microsoft's Azure cloud computing platform will also become the main platform for OpenAI to train its artificial intelligence models.

On April 17 this year, the EU decided not to conduct a formal antitrust investigation into the $130 billion investment between Microsoft and OpenAI. This decision quelled concerns in the market that this investment might be forced to be interrupted. The EU believes that the cooperation between Microsoft and OpenAI does not constitute an acquisition, and Microsoft does not control the development direction of OpenAI, so it does not meet the conditions for a formal investigation.