EU, OpenAI Followed by Possible Investigation into 'MS-Mistral AI Partnership'

Microsoft (MS) is facing the possibility of an antitrust investigation by European Union (EU) competition authorities regarding its partnership with French AI startup MistralAI, following its collaboration with ChatGPT developer OpenAI.

[Image source=Reuters Yonhap News]

Lea Zuber, spokesperson for the EU Commission, stated on the 27th (local time), "The Commission is reviewing agreements made between major digital market players and generative AI developers and providers," adding, "We will analyze these." According to the Commission's own analysis, if the partnership between MS and MistralAI is deemed to potentially violate antitrust laws, it could lead to a formal investigation.

This remark came the day after MS and MistralAI announced their partnership. MS stated in a press release the previous day, "We announce a multi-year partnership with MistralAI, a recognized leader in the AI field," adding, "This is to create new commercial opportunities and expand into global markets." MistralAI, valued at 2 billion euros, is a newly established AI startup founded last year by Arthur Mensch, a 30-something prodigy formerly at Google, along with two researchers from Meta Platforms. Known as the European version of OpenAI, MistralAI is based on an ‘open-source’ model, unlike OpenAI, which does not disclose any of its AI model’s source components.

MS’s investment in MistralAI amounts to approximately 15 million euros (about 21.7 billion KRW), and it is expected to acquire some equity in MistralAI in the future. This is significantly lower than the 13 billion dollars invested in OpenAI. Through its investment in OpenAI, MS holds a 49% stake.

In this context, MS is under pressure from regulatory authorities in the EU, the US, and the UK. The EU Commission, which is strengthening antitrust regulations against big tech companies, announced last month that it is "checking whether MS’s investment in OpenAI can be reviewed under EU merger regulations." The UK Competition and Markets Authority (CMA) has also begun collecting preliminary materials to investigate whether the investment and cooperation between MS and OpenAI should be considered a merger. Bloomberg reported, "(The EU’s) current move could ultimately lead to a formal investigation and potentially derail MS’s plans."

Meanwhile, the EU is reportedly set to impose fines amounting to billions of won on Apple for antitrust violations. This is based on findings that Apple abused its dominant position in the App Store and imposed anti-competitive trading practices on competitors. Additionally, the EU will implement the Digital Markets Act (DMA) next month to prevent monopolies by big tech companies.