The European Union is launching an investigation into Microsoft's partnership with OpenAI, raising concerns about potential anti-competitive practices in the artificial intelligence industry. The EU's move follows a similar announcement by UK antitrust officials last month and a preliminary probe by the US Federal Trade Commission.

OpenAI, one of the most influential companies in the AI industry, gained attention last year due to a high-profile leadership crisis that resulted in the firing and reinstatement of CEO Sam Altman. Microsoft, with its non-voting seat on OpenAI's board and multi-billion-dollar investment in the company, has also come under scrutiny.

Microsoft has emphasized that it does not own any portion of OpenAI and that its board seat does not constitute a merger. OpenAI, on the other hand, has stated that Microsoft's board seat does not grant them control over the startup's operations. However, the EU is investigating whether Microsoft's investment in OpenAI falls under the EU Merger Regulation.

The European Commission, the EU's executive arm, stated that it is not only examining Microsoft's investment but also reviewing business contracts between other AI startups and large tech companies. These contracts often involve commitments to use specific cloud providers or investments in the form of free cloud computing credits, which critics argue could lead to "locking in" AI developers as customers.

The European Commission has invited public feedback on the state of competition in AI and virtual reality industries. Margrethe Vestager, a top EU antitrust official, emphasized the importance of maintaining competition in these rapidly developing markets to ensure the best and most innovative products for consumers.

Microsoft's investment in OpenAI includes cloud credits, and the tech giant has been integrating OpenAI's technology into its own services. Microsoft CEO Satya Nadella has expressed support for OpenAI's mission and independence, stating that Microsoft has no issues with it.

The EU's announcement coincides with Vestager's visit to the United States, where she is expected to meet with several tech CEOs to discuss competition issues. The European Commission's review of Microsoft's investment in OpenAI could potentially lead to a formal investigation, with the possibility of unconditional clearance, concessions, or blocking the deal to protect competition in the EU.

OpenAI, known for its generative AI chatbot ChatGPT, has received significant funding from Microsoft, including a $1 billion investment in 2019. Generative AI systems like ChatGPT have garnered global attention for their advanced capabilities in generating text, images, videos, and audio recordings based on user prompts.

The European Commission is seeking input from businesses and experts on competition issues related to generative AI. The commission is also closely monitoring AI partnerships to ensure they do not distort market dynamics. Vestager is scheduled to meet with OpenAI executives, as well as CEOs of Google, Apple, and Nvidia, during her trip to the US.