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Microsoft and OpenAI partnership, Google and Samsung's AI deal in EU crosshairs
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Microsoft and OpenAI partnership, Google and Samsung's AI deal in EU crosshairs
Jun 28, 2024 8:48 AM

BRUSSELS, June 28 (Reuters) - EU antitrust regulators

will seek additional third-party views on the partnership

between Microsoft ( MSFT ) and OpenAI as well Google's

artificial-intelligence deal with Samsung, EU

competition chief Margrethe Vestager said on Friday.

The move could lead to investigations and possible

sanctions, underscoring the unease among regulators worldwide on

Big Tech leveraging its dominance into the new technology.

Vestager had in March sent questionnaires to Microsoft ( MSFT ),

Google, Meta's Facebook and ByteDance's TikTok as well

as other big tech companies related to their AI partnerships.

"We have reviewed the replies, and are now sending a

follow-up request for information on the agreement between

Microsoft ( MSFT ) and OpenAI. To understand whether certain exclusivity

clauses could have a negative effect on competitors," she told a

conference.

Reuters was first to report that EU regulators were building

a case that could lead to an investigation into the partnership

between the two companies.

The European Commission, which acts as the EU

competition enforcer, will not examine Microsoft's ( MSFT ) partnership

with OpenAI under EU merger rules as the former has not gained

control over the latter, Vestager said.

While OpenAI's parent is a nonprofit, Microsoft ( MSFT ) has

invested $13 billion in a for-profit subsidiary, for what would

be a 49% stake.

Vestager also cited concerns about Big Tech's AI

partnerships making it difficult for smaller AI developers to

reach users.

"We are also sending requests for information to better

understand the effects of Google's arrangement with Samsung to

pre-install its small model Gemini Nano on certain Samsung

devices," she said.

Google in January

reached a multi-year deal

with the South Korean company to embed its generative

artificial intelligence technology in Samsung's Galaxy S24

series smartphones.

Vestager also said she was looking into "acqui-hires,"

where one company acquires another mainly for its talent, as

exemplified in

Microsoft's ( MSFT ) $650-million acquisition of startup Inflection

in March that allowed it to use Inflection's models and

hire most of its staff.

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