Microsoft Faces EU Scrutiny Over Deal with Mistral AI

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Microsoft’s recent deal with French tech startup Mistral AI has drawn attention from European Union lawmakers who are demanding an investigation into the tech giant’s growing influence. This comes amid existing antitrust investigations concerning Microsoft’s partnership with ChatGPT-maker OpenAI.

An Unexpected Investment

The tech giant’s €15-million investment in Paris-based Mistral AI caught EU lawmakers by surprise. Microsoft plans on making Mistral’s AI models available through its Azure cloud computing platform. Initially, a Microsoft spokesperson stated that the company had invested in Mistral without holding a stake. However, it was later clarified that Microsoft’s investment would convert into equity in Mistral’s next funding round, a common practice among large tech companies investing in AI startups.

Previous Antitrust Investigations

Microsoft has previously faced regulatory pressure over its investment in OpenAI. Despite clarifying that it does not hold a stake in the company and therefore cannot control it, Microsoft’s access to OpenAI’s advanced models and profit-sharing rights have drawn antitrust scrutiny in both the EU and the U.S.

Lobbying Efforts Raise Eyebrows

Mistral’s lobbying efforts behind closed doors for exemptions for certain AI systems have been called into question, particularly in light of the company’s deal with Microsoft. Lawmakers are concerned that Mistral’s lobbying was an attempt to weaken the safety regulations of general purpose AI models with systemic risks.

The AI Act and European Champions

The recent events have reignited discussions around the AI Act, a comprehensive law governing AI in the EU. Germany, Italy, and France had previously argued for exemptions for companies making generative AI models to protect European startups from over-regulation. However, the recent deal between American-based Microsoft and European startup Mistral has raised questions about the motivations behind these lobbying efforts.

Calls for Investigation

The concentration of power and money in the tech industry has led to calls for an investigation into the matter. Alexandra Geese, a member of the European Parliament, stated that the recent events warrant an investigation into Mistral and the French government’s behavior during the negotiations. Both Microsoft and Mistral AI declined to comment on the issue.