Microsoft’s OpenAI ties face potential EU merger investigation

Microsoft Corp.’s $13 billion investment into OpenAI Inc. is facing the potential of a full-blown European Union merger probe, after a mutiny at the ChatGPT creator laid bare deep ties between the two companies.

The European Commission said on Tuesday that it’s examining whether Microsoft’s investment in OpenAI might be reviewable under the bloc’s merger rules. If found to reach the necessary conditions, regulators may start a formal probe into whether the arrangement should be allowed. The EU move follows a similar step by the UK’s Competition and Markets Authority.

Microsoft has benefited richly from its investments, totaling as much as $13 billion, in OpenAI. By integrating OpenAI’s products into virtually every corner of its core businesses, the software giant very quickly established itself as the undisputed leader of AI among big tech firms. Rival Alphabet Inc.’s Google has been racing to catch up ever since.

The recent firing — and subsequent rehiring — of Sam Altman as chief of OpenAI exposed how inextricably linked the two companies have become. Microsoft shares fell immediately after OpenAI’s board ousted Altman. Microsoft chief executive officer Satya Nadella personally helped negotiate and advocate for his return to the company — at one point offering to hire Altman himself, along with other employees at OpenAI who wanted to leave.