The competition inquiry comes amid heightened copyright scrutiny involving the use of OpenAI’s generative AI tools. Credit: MixMagic / Getty Images The European Union is investigating whether Microsoft’s investment in OpenAI amounts to a concealed merger amid efforts to regulate the rapidly advancing generative AI (genAI) sector. The European Commission, serving as the EU’s executive branch, said Tuesday it is starting a competition inquiry into the markets of virtual worlds and genAI; the goal is to focus on the current level of competitiveness and the role law might play in shaping these fields. “The European Commission will carefully review all input received through the calls for contributions. Following that review, the Commission may organize a workshop in the second quarter of 2024 to bring together all different perspectives emerging from the contributions and continue this reflection,” it said in a statement. The EU is calling for feedback from interested stakeholders and set a deadline for submissions of March 11. Growing AI business The commission noted that with more than $7.9 billion invested in AI in the EU in 2023, raising the value of the region’s “virtual worlds” market to $12 billion, rapid growth is likely to influence business competition significantly. “Virtual worlds and generative AI are rapidly developing,” said Margrethe Vestager, EU Commission executive vice president in charge of competition policy. “It is fundamental that these new markets stay competitive, and that nothing stands in the way of businesses growing and providing the best and most innovative products to consumers Even so, the EU’s efforts might not affect genAI development, said Gal Ringel, the CEO of Mine, a data privacy firm developing solutions for emerging AI regulations. “OpenAI has grown so large and influential over the past year that even a ruling against the company now would only prove a temporary roadblock, as the company would surely find ample investment if it needed to pursue that route,” he said. OpenAI leadership turmoil The inquiry follows a period of disruption at OpenAI in late November when the board unexpectedly decided to remove founder and CEO Sam Altman. In response, Microsoft, an investor in OpenAI, promptly announced it would employ Altman. A few days later, Altman was back in place at OpenAI. The turmoil comes as genAI platforms and tools come under increasing regulatory scrutiny due to safety and monopoly concerns. In December, the UK’s Competition and Markets Authority announced it is gathering opinions to determine whether the collaboration between Microsoft and OpenAI should be treated as an effective merger. That move could precede a full-scale investigation. Various nations have moved to try and put guardrails around the fast-evolving technology. During the inaugural session of the AI safety summit last year, 28 countries endorsed a pledge to collaborate on research in AI safety. The United States is focusing on AI safety standards via an executive order signed by President Joseph R. Biden Jr. And China has enacted specific legislation to regulate genAI. OpenAI is also facing questions over its use of copyrighted material. The New York Times sued OpenAI and Microsoft last month, accusing the companies of infringing on its copyrights by using millions of its articles to train genAI models. But the US is far less likely than the EU to attempt to regulate OpenAI or AI development in a “meaningful way,” Ringel said. “With the country being unable to pass a federal data protection law, it seems unlikely they could pass comprehensive AI regulation during an election year.” Microsoft and OpenAI did not immediately respond to requests for comment. Related content feature Windows 11 Insider Previews: What’s in the latest build? Get the latest info on new preview builds of Windows 11 as they roll out to Windows Insiders. Now updated for Build 22635.3566 for the Beta Channel, released on April 26, 2024. By Preston Gralla Apr 26, 2024 251 mins Small and Medium Business Microsoft Windows 11 news Dropbox adds end-to-end encryption for team folders Dropbox this week unveiled a range of features, including security updates and key management, and the ability to co-edit Microsoft 365 documents from within the file-sharing app. By Matthew Finnegan Apr 26, 2024 3 mins Cloud Storage Collaboration Software Productivity Software feature Android versions: A living history from 1.0 to 15 Explore Android's ongoing evolution with this visual timeline of versions, starting B.C. (Before Cupcake) and going all the way to 2024's Android 15 (beta) release. By JR Raphael Apr 26, 2024 23 mins Small and Medium Business Smartphones Android news analysis The unspoken obnoxiousness of Google's Gemini improvements Google's Gemini chatbot is seeing all sorts of upgrades on Android this week, but those advancements reveal a darker underlying reality. By JR Raphael Apr 26, 2024 12 mins Google Assistant Google Android Podcasts Videos Resources Events SUBSCRIBE TO OUR NEWSLETTER From our editors straight to your inbox Get started by entering your email address below. Please enter a valid email address Subscribe