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AI deals between: Microsoft with OpenAI, Google with Samsung

Microsoft's deal with OpenAI and Google's partnership with Samsung are under EU antitrust scrutiny, focusing on exclusivity clauses. EU competition chief Margrethe Vestager announced further inquiries to gather opinions from third parties.

These investigations reflect global regulatory concerns about Big Tech extending their influence into AI, similar to their dominance in other markets. In March, Vestager sent inquiries to major tech firms, including Microsoft, Google, Meta, and ByteDance, about their AI collaborations.

"We're reviewing responses and will follow up on Microsoft's agreement with OpenAI to see if exclusivity could harm competition," Vestager said at a conference. Reuters highlighted the potential for a formal investigation.

A Microsoft representative stated they are prepared to answer any additional questions from the European Commission. Vestager clarified that their partnership wouldn't fall under EU merger rules due to a lack of control, even though Microsoft has invested $13 billion in a for-profit OpenAI subsidiary for a 49% stake.

Vestager also expressed concern about large tech companies hindering smaller AI developers from accessing the market. Additionally, she mentioned Google's deal with Samsung to pre-install its Gemini Nano AI model on Galaxy S24 phones, which prompted further information requests.

Vestager is also examining "acqui-hires," where companies acquire others mainly for their talent, such as Microsoft's $650-million acquisition of startup Inflection. She emphasized ensuring that such practices don't bypass merger control rules if they lead to market concentration.

Published Date : 29 Jun 2024