Microsoft CEO Satya Nadella expressed his confidence in partner OpenAI’s governing structure, stating that he has no issues with its makeup. Nadella’s comments came at a Bloomberg News event during the World Economic Forum in Davos, Switzerland. OpenAI recently made headlines when its CEO, Sam Altman, was briefly fired, leading to a crisis at the company. However, Altman was subsequently reinstated under a new board structure, with Microsoft taking on a non-voting observer role.
While Nadella remains unfazed by the governance crisis at OpenAI, European watchdogs have now turned their attention to the relationship between Microsoft and the AI startup. The European Commission has announced that it will investigate Microsoft’s involvement with OpenAI to determine if it warrants further scrutiny. Margrethe Vestager, the commission’s executive vice president in charge of competition policy, emphasized the need for competitive markets where businesses can innovate and provide the best products to consumers.
Similarly, the United Kingdom’s Competition and Markets Authority (CMA) has expressed interest in investigating recent developments between Microsoft and OpenAI. The CMA has issued an Invitation to Comment (ITC), inviting relevant parties to provide input and opinions before it decides whether to open a formal investigation. The CMA aims to assess whether these developments constitute a merger situation and if they could potentially impact competition in the country.
According to a source familiar with the deal, Microsoft’s agreement with OpenAI guarantees the company a substantial portion of OpenAI’s profits under certain conditions. Nadella highlighted the distinction between their partnership and outright ownership, stating that partnerships can promote healthy competition. He also noted that Microsoft’s investments in computing power and OpenAI were considered highly risky yet unconventional.
As European regulatory bodies continue to investigate the Microsoft-OpenAI relationship, Nadella remains optimistic about their partnership. Time will tell how these inquiries and market forces ultimately shape the AI landscape and influence the competitive market for virtual worlds and generative AI technologies.
