Microsoft (MSFT)’s $13 billion investment and growing ties with artificial intelligence powerhouse OpenAI are under scrutiny in the European Union. Antitrust authorities in the EU are poised to quiz the AI startup rivals, focusing on whether their exclusive cloud technology agreement with the software giant amounts to an antitrust violation.
Microsoft OpenAI Cloud Deal
The bloc’s antitrust chief, Margrethe Vestager, has confirmed that regulators are investigating whether the cloud technology exclusivity agreement between Microsoft and OpenAI might affect competition in the burgeoning sector. The probe comes on the two companies inking a deal that will see Microsoft Azure becoming the exclusive cloud provider of OpenAI.
The cloud technology arrangement comes on Microsoft investing nearly $13 billion in OpenAI. The amount has helped accelerate OpenAI’s artificial intelligence development and innovation. In return, Microsoft has been given access to OpenAI developments, including the integration of ChatGPT into its search engine Bing.
The growing ties between big techs and emerging AI startups have caught the attention of regulators. A bone of contention has been that the big companies are trying to use their big balance sheet to buy out emerging startups that have the potential to disrupt their core business. Likewise, there have been concerns that the growing ties could end up crippling innovation and competition around artificial intelligence.
The EU’s competition division announced in January that it was examining if Microsoft’s collaboration with OpenAI needed further scrutiny following a rebellion at OpenAI that revealed strong connections between the two companies.
This collaboration caught the attention of authorities, including the EU, the UK’s Competition and Markets Authority, and the US Federal Trade Commission, after a controversy involving the AI Company over the dismissal and later rehire of Sam Altman as OpenAI’s CEO in the previous year. Microsoft’s CEO, Satya Nadella, played a direct role in securing Altman’s reinstatement at the company, even suggesting he could hire Altman and other OpenAI staff who wished to leave.
Amazon Adept Poach
Amid the artificial intelligence arms race, Amazon has poached top executives and other employees from Adept AI labs. The new hires come from the e-commerce giant seeking access to valuable experience and skill set needed to bolster the development of its AI innovations. In addition, Amazon is poised to license Adept’s technology-developing agents or tools that can perform tasks autonomously.
The agreement also arrives when tech firms have increased recruitment from high-profile AI startups developing expensive basic frameworks. In March, Microsoft absorbed many Inflection AI employees and negotiated a deal to acquire its technology for $650 million.
The growing ties come on Adept raising $350 million last year for a valuation of about $1 billion. Over the past year, the AI startup has been developing foundational AI models and business tools. Even with the high-profile exit, the startup plans to operate independently.
Amazon (AMZN) is one of the big tech giants that has gone far and beyond as it looks to accelerate AI innovation and develop tools to bolster its multibillion e-commerce and cloud technology. It has already unveiled and integrated an AI-powered shopping chatbot and other tools for its retail sites.
