At the beginning of the year, the European Commission considered the possibility of opening an investigation into Microsoft’s 13 billion dollar investment in OpenAI, the company that created the well-known generative artificial intelligence service known as “Chat Gpt”.
For several years now, at least since 2019, the two companies seem to have established a partnership with respect to which the European executive has deemed it necessary to initiate the necessary checks in order to evaluate the consequences of this collaboration on the market and on competitive dynamics.
In particular, in January 2024, the Commission launched a public consultation phase, inviting companies in the digital sector to provide observations on the level of competitiveness within the market of new technologies and indications on how European legislation can contribute to ensuring the competitiveness in these markets.
Once these contributions have been analysed, the Commission could decide to hold a seminar to plan the actions necessary to guarantee the healthy development of the digital market, balancing the needs of the various players in the field, from the end user to the manufacturing companies.
Furthermore, the links between Microsoft and Open AI had already attracted the attention of the UK CMA at the end of 2023, when the English competition authority invited interested third parties to comment on the partnership, also drawing attention to the consequences of a possible acquisition by Microsoft of OpenAI.
However, Microsoft made it clear that the investment would be aimed at promoting “greater innovation and competition in the AI sector, while preserving independence for both companies”.
The European Commission has therefore decided not to launch any investigation, considering that there is insufficient evidence to speak of an acquisition and that, at least formally, Microsoft does not directly control OpenAI.
However, the fact remains that the generative AI revolution needs a huge amount of computing power.
In other words, systems like Chat Gpt need services cloud and devices equipped with high processing capacity. It is no coincidence that Open AI has become one of Microsoft’s main customers business cloud.
We need to understand whether the commercial relationships between Microsoft and Open AI risk distorting the market for new technologies, or whether this danger depends solely on Microsoft’s position and its commercial practices.
It would seem that the European Commission considers it more likely that the distorting effect is the result of commercial practices implemented by Microsoft, but it remains to be seen whether there is sufficient evidence to be able to launch an investigation.
What is certain is that the artificial intelligence market risks moving away from the competitive model advocated by the European Union, due to the presence of a few companies that hold enormous market power and which could also hinder the entry of new economic operators .
The British antitrust authority recently identified within the AI market sector an “interconnected network” of commercial agreements involving a few market leaders: Meta, Amazon, Microsoft, Nvidia and Google.
These commercial ties confirm that at the moment the artificial intelligence sector is characterized by the presence of a few powerful players, who could end up definitively dominating the market and this to the detriment of competition.
