Microsoft’s close relationship with OpenAI that has allowed it to steal a march in the competitive generative artificial intelligence space could face an investigation from the European Union.

Citing people familiar with the matter, Reuters reported on Thursday that the Windows maker’s $13 billion investment in the Sam Altman-led OpenAI could be subject to EU antitrust scrutiny with regulators building their case.

Specifically, the report notes that the European Commission has decided against investigating the tie-up under EU merger rules, and is instead focusing on an antitrust investigation which looks at whether the partnership restricts competition or whether Microsoft’s market power distorts the market through certain practices.

A final decision is yet to be reached on whether an investigation will actually be opened, with the people telling Reuters that the Commission may eventually decide not to carry out what would become a highly contentious investigation into two of the largest players in the burgeoning AI space.

While having a non-voting position on OpenAI’s board, Microsoft has consistently insisted that it does not own any portion of the company and that it has no influence on its internal decision making.

In comments to the newswire, a spokesperson for the Commission said that it is checking whether the investment might be reviewable under the EU Merger Regulation, stating: "In this respect, it is however important to underline that in order to look into potential competition concerns, the Commission first needs to conclude that there has been a change of control on a lasting basis.”

Regulators are increasingly focusing on the relationship between established big tech players and AI startups. The US Federal Trade Commission (FTC) earlier this year opened investigations into “the investments and partnerships being formed between AI developers and major cloud service providers,” with Amazon, Google and Microsoft specifically targeted along with OpenAI and Antropic, the maker of the Claude generative AI platform.

---