Law360, London (January 9, 2024, 2:00 PM GMT) -- The European Union antitrust authority said Tuesday that it has launched an investigation into whether Microsoft's investment of more than $10 billion in OpenAI should be reviewed under merger control rules, as the bloc homes in on competition in generative artificial intelligence.

Microsoft, which did not immediately respond to a request for comment, has invested more than $10 billion in OpenAI since 2019. The technology giant has a minority interest in OpenAI, but it has said that it does not own any portion of the AI company and is simply entitled to a share of profits.

The probe into the investment in the ChatGPT developer is part of a review into generative AI and so-called virtual worlds, which includes extended reality. The commission is looking into how agreements between large digital companies are changing market dynamics.

Venture capital firms across the bloc have invested more than €7.2 billion ($7.9 billion) in AI during 2023, the comission said. And the market for virtual worlds, which allows users to blend physical and digital worlds in real-time, reached more than €11 billion in Europe in 2023.

The commission said it expects both technologies to grow exponentially in the next few years and for them to change how businesses compete.

"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," said Margrethe Vestager, executive vice president for competition policy at the commission.

The antitrust authority has asked interested parties to share information about competition in the sector by March 11. The commission said that it might then organize a workshop by June.

Other anticompetition agencies are keeping a close eye on generative AI. The Competition and Markets Authority in the U.K. said in December that it is reviewing whether the decision by Microsoft to take a seat on OpenAI's board could lead to competition concerns.

Sam Altman, chief executive of OpenAI, said on Nov. 29 that Microsoft will join its board as a "non-voting observer." However, the role would give Microsoft access to OpenAI's data, even if the company does not have voting rights.

Altman's announcement came amid a tumultuous period at OpenAI, which previously said that Altman would leave the company as chief executive only to reinstate him a couple of weeks later. 

The CMA is trying to determine whether the developments have resulted in a so-called acquisition of control, where one side has material influence, de facto control or more than 50% of the voting rights of another company.

--Editing by Joe Millis.

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