Possibility of Investigations Extending to the UK, EU, and the US Emerges
OpenAI, the developer of ChatGPT collaborating in the field of artificial intelligence (AI), and the American company Microsoft (MS) may face investigations by U.S. and European authorities regarding potential violations of merger and antitrust laws.
On the 8th (local time), the UK Competition and Markets Authority (CMA) announced that it has begun preliminary data collection to investigate whether the investment and partnership between MS and OpenAI should be considered a merger. This includes examining MS's years-long investment in OpenAI, their joint technology development, and MS's exclusive supply of cloud services to OpenAI to determine if these arrangements effectively constitute a merger.
Sam Altman, CEO of OpenAI (left), and Satya Nadella, CEO of Microsoft (MS) [Image source=AP Yonhap News]
MS is the largest investor in OpenAI, holding a 49% stake. Last month, MS announced it would participate in OpenAI's board of directors as a non-voting observer.
As the first step before launching a formal investigation, the CMA is conducting an Information and Consultation (ITC) process to gather opinions and information from stakeholders. They plan to examine whether the partnership between the two companies has resulted in one party gaining control over the other or altering the nature of control.
The U.S. Federal Trade Commission (FTC) is also considering the possibility of investigating MS and OpenAI. According to local media, the FTC is reviewing the nature of MS's investment in OpenAI and potential antitrust violations. However, this is currently at a preliminary stage and is not an official investigation.
MS reportedly believes that its investment in OpenAI does not constitute control of the company under U.S. law and therefore did not report it to the FTC. OpenAI is a nonprofit organization, and acquisitions of nonprofits do not require reporting. Nevertheless, given that MS's investment in OpenAI amounts to $13 billion, the FTC appears to be conducting a related inquiry.
The European Union (EU) is also monitoring the relationship between MS and OpenAI. The EU Directorate-General for Competition sent an email to U.S. media on the same day stating, "Even before recent incidents involving OpenAI's management, we have been examining MS's role on OpenAI's board and the control situation of OpenAI, including investment agreements between the two companies."
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