(In MARCH 14 story corrects to read '15 million euros' (not '15

billion euros'), in paragraph 11)

By Foo Yun Chee

BRUSSELS, March 14 (Reuters) - Alphabet unit

Google enjoys a competitive edge in generative artificial

intelligence due to its trove of data and AI-optimised chips,

Microsoft ( MSFT ) has told EU antitrust regulators,

underscoring the rivalry between the two tech giants.

The comments by Microsoft ( MSFT ) were in response to a consultation

launched by the European Commission in January on the level of

competition in generative AI.

The growing popularity of generative AI, which can generate

human-like responses to written prompts and is exemplified by

Microsoft ( MSFT )-backed OpenAI's ChatGPT and Google's chatbot Gemini,

has triggered concerns about misinformation and fake news.

"Today, only one company - Google - is vertically integrated

in a manner that provides it with strength and independence at

every AI layer from chips to a thriving mobile app store.

Everyone else must rely on partnerships to innovate and

compete," Microsoft ( MSFT ) said in its report to the Commission.

It said Google's self-supply AI semiconductors will give it

a competitive advantage for the years to come, while its large

sets of proprietary data from Google Search Index and YouTube

enable it to train its large language model Gemini.

"YouTube provides an unparalleled set of video content; it

hosts an estimated 14 billion videos. Google has access to such

content; but other AI developers do not," Microsoft ( MSFT ) said.

It said AI-powered voice assistants such as Google's Google

Assistant and Apple's ( AAPL ) Siri give both companies an

advantage.

"They are well positioned to evolve and leverage their

respective existing voice assistants into leadership positions

in generative AI. New entrants and competitors of Google and

Apple ( AAPL ) will not enjoy the same advantages," Microsoft ( MSFT ) said.

Microsoft ( MSFT ), whose more than $10 billion investment in OpenAI

is now in EU antitrust regulators' crosshairs, also sought to

fend off regulatory worries about such partnerships between Big

Tech and start-ups.

"All of these start-ups relied on different forms of

investments and partnerships that enabled them to enter and

expand in the space," it said.

It pointed to Anthropic which has Google and Amazon ( AMZN )

as investors, France's Mistral in which Microsoft ( MSFT ) has invested

15 million euros and Canada's Cohere which has Salesforce and

Nvidia as investors.

"Encouraging pro-competitive partnerships in the AI space is

an effective way to prevent companies from becoming vertically

integrated in a manner that would result in an anticompetitive

advantage," Microsoft ( MSFT ) said.