EU to Analyze Partnership Between Microsoft and Mistral AI

The European competition regulator will examine a newly announced partnership between Microsoft and French artificial intelligence startup Mistral AI for potential anti-competitive effects.

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The review comes a day after computing giant Microsoft announced that it has entered a $16.3 million, multiyear partnership with Paris-based Mistral AI in which the tech giant will provide access to its cloud infrastructure to accelerate the French startup’s next-generation large language models. The deal enables Microsoft to leverage the French startup’s capabilities to pitch a model-as-as-service approach to its customers.

“This partnership reinforces Microsoft’s ongoing efforts to enhance our AI offerings and deliver unparalleled value to our customers,” Microsoft said on Monday.

On Tuesday, a European Commission spokesperson told Bloomberg that the trading bloc will analyze the deal. The European Commission in January took preliminary steps toward opening an antitrust investigation into Microsoft’s financial interest in ChatGPT maker OpenAI (see: EU Commission Examines OpenAI, Microsoft Relationship).

The same partnership also faces scrutiny from the British competition regulator.

Microsoft is estimated to have invested $13 billion in San-Francisco-based OpenAI. In both partnerships, Microsoft will support key infrastructure requirements by making Azure the sole cloud provider of the companies.

Redmond’s partnership with the French startup came as a surprise to many in Brussels, who worry it could result in the AI market being monopolized by a few non-EU tech companies.

Mistral AI, which is seen as a capable competitor to OpenAI, was reportedly at the forefront of lobbying efforts by European lawmakers to soften the European AI Act. The company argued that binding regulations could make it difficult for European startups, including itself, to compete with big American corporations.

Advocacy groups have argued that lawmakers took cues from the lobbying effort to introduce loopholes into the regulation.

“It does seem rather coincidental that news of this partnership emerged shortly after the AI Act negotiations were finalized. This is a win for Microsoft who further diversifies the portfolio of models at its disposal,” said Zuzanna Warso, director of research at digital rights group Open Future Foundation.

European Parliament member Kai Zenner said the Microsoft-Mistral AI partnership has debunked the “digital sovereignty” pitched by European lawmakers.

“Almost no EU startup seems to manage its scale-up without US or Chinese support. Hopefully this episode means that the flawed #digital #sovereignty argument that was debunked again and again but is nevertheless still being used in #EU #policymaking is finally gone for good!” Zenner said.

Microsoft and OpenAI did not immediately respond to a request for comment.