Microsoft’s multibillion-dollar investment in OpenAI could face EU merger probe
Jaap Arriens | Nurphoto | Getty Images
Microsoft’s multibillion-dollar investment in artificial intelligence firm OpenAI could face a full-blown merger investigation in the European Union, EU officials signaled Tuesday.
The European Commission, which is the executive arm of the EU, said that it was embarking on a competition investigation looking at the markets for virtual worlds and generative artificial intelligence.
As part of its assessment, the Commission said that it wants to understand how competitive these markets are currently and gain insight on how competition law can help these fields.
The EU Commission also said it is “looking into some of the agreements that have been concluded between large digital market players and generative AI developers and providers” and singled out the Microsoft-OpenAI tie-up as a particular deal it will be studying.
“The European Commission is checking whether Microsoft’s investment in OpenAI might be reviewable under the EU Merger Regulation,” the Commission said in a statement on Tuesday.
Microsoft did not immediately respond to a CNBC request for comment.
The Commission said it has sent requests for information to “several large digital players” and is also seeking views from interested parties, which have until March 11 to submit responses.
“Virtual worlds and generative AI are rapidly developing,” Vestager said in a statement Tuesday. “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.”
Microsoft has put billions of dollars into OpenAI, the firm behind the popular AI chatbot ChatGPT. The company has integrated some OpenAI technology into its Office, Bing, and Windows products and provides OpenAI with its own Azure cloud computing tools.
The Redmond, Washington-based technology giant first invested in OpenAI in 2019, contributing $1 billion in cash.
The company then grabbed headlines last year, when it reportedly poured a further $10 billion into OpenAI, with its total investment to date reportedly swelling to $13 billion.
News of the EU review comes after the U.K.’s Competition and Markets Authority announced in December that it was launching an initial review into Microsoft’s investment. The U.S. Federal Trade Commission is also reportedly assessing the tie-up, according to Bloomberg News.
The CMA said it is assessing whether Microsoft’s stake in AI created a “relevant merger situation,” citing “a number of developments in the governance of OpenAI, some of which involved Microsoft” as a primary source of concern.
Earlier in the year, OpenAI faced a period of tumult when its CEO Sam Altman was ousted from the board in a shock move. In a dramatic turn of events, ex-Twitch CEO Emmett Shear briefly took the top job, before being removed and replaced with Altman, while the board was given a makeover.
As part of that refresh, Microsoft added its own observer to sit on the board, leading to concerns that the company may be exerting control over OpenAI. For its part, Microsoft has sought to stressed that its designated board observer, who was recently named Dee Templeton, is a nonvoting member.
At the time of the CMA announcement, Microsoft said that it did not in any way hold equity ownership in OpenAI, while OpenAI said that it remained independent and operates competitively.
“Their non-voting board observer does not provide them with governing authority or control over OpenAI’s operations,” an OpenAI spokesperson told CNBC via email in December.
“While details of our agreement remain confidential, it is important to note that Microsoft does not own any portion of OpenAI and is simply entitled to share of profit distributions,” Frank Shaw, Microsoft Chief Communications Officer, said in a December statement.
At the heart of concerns is Microsoft’s close partnership and investment in OpenAI, which gives the Redmond titan access to one of the most advanced developers of AI tools today. OpenAI’s GPT-4 large language model can handle a rumored 25,000 words of input text — a big step up from the existing ChatGPT limit of 4,096 characters.
Academics have said that GPT-4 has demonstrated human-level performance in various academic exams, while some AI researchers and technologists have speculated GPT-4 may come close to artificial general intelligence, or AGI, which is meant to be as smart or smarter than humans.
– CNBC’s Hayden Field and Kif Leswing contributed to this report
An attendee wearing a Super Mario costume uses a Nintendo Switch 2 game console while playing a video game during the Nintendo Switch 2 Experience at the ExCeL London international exhibition and convention centre in London, Britain, April 11, 2025.
Isabel Infantes | Reuters
Nintendo on Friday announced that retail preorder for its Nintendo Switch 2 gaming system will begin on April 24 starting at $449.99.
Preorders for the hotly anticipated console were initially slated for April 9, but Nintendo delayed the date to assess the impact of the far-reaching, aggressive “reciprocal” tariffs that President Donald Trump announced earlier this month.
Most electronics companies, including Nintendo, manufacture their products in Asia. Nintendo’s Switch 1 consoles were made in China and Vietnam, Reuters reported in 2019. Trump has imposed a 145% tariff rate on China and a 10% rate on Vietnam. The latter is down from 46%, after he instituted a 90-day pause to allow for negotiations.
Nintendo said Friday that the Switch 2 will cost $449.99 in the U.S., which is the same price the company first announced on April 2.
“We apologize for the retail pre-order delay, and hope this reduces some of the uncertainty our consumers may be experiencing,” Nintendo said in a statement. “We thank our customers for their patience, and we share their excitement to experience Nintendo Switch 2 starting June 5, 2025.”
The Nintendo Switch 2 and “Mario Kart World“ bundle will cost $499.99, the digital version “Mario Kart World” will cost $79.99 and the digital version of “Donkey Kong Bananza” will cost $69.99, Nintendo said. All of those prices remain unchanged from the company’s initial announcement.
However, accessories for the Nintendo Switch 2 will “experience price adjustments,” the company said, and other future changes in costs are possible for “any Nintendo product.”
It will cost gamers $10 more to by the dock set, $1 more to buy the controller strap and $5 more to buy most other accessories, for instance.
WATCH: Nintendo has ‘a lot of work to do’ to convince casual users to upgrade to Switch 2: Kantan Games
An employee walks past a quilt displaying Etsy Inc. signage at the company’s headquarters in the Brooklyn.
Victor J. Blue/Bloomberg via Getty Images
Etsy is trying to make it easier for shoppers to purchase products from local merchants and avoid the extra cost of imports as President Donald Trump’s sweeping tariffs raise concerns about soaring prices.
In a post to Etsy’s website on Thursday, CEO Josh Silverman said the company is “surfacing new ways for buyers to discover businesses in their countries” via shopping pages and by featuring local sellers on its website and app.
“While we continue to nurture and enable cross-border trade on Etsy, we understand that people are increasingly interested in shopping domestically,” Silverman said.
Etsy operates an online marketplace that connects buyers and sellers with mostly artisanal and handcrafted goods. The site, which had 5.6 million active sellers as of the end of December, competes with e-commerce juggernaut Amazon, as well as newer entrants that have ties to China like Temu, Shein and TikTok Shop.
By highlighting local sellers, Etsy could relieve some shoppers from having to pay higher prices induced by President Trump’s widespread tariffs on trade partners. Trump has imposed tariffs on most foreign countries, with China facing a rate of 145%, and other nations facing 10% rates after he instituted a 90-day pause to allow for negotiations. Trump also signed an executive order that will end the de minimis provision, a loophole for low-value shipments often used by online businesses, on May 2.
Temu and Shein have already announced they plan to raise prices late next week in response to the tariffs. Sellers on Amazon’s third-party marketplace, many of whom source their products from China, have said they’re considering raising prices.
Silverman said Etsy has provided guidance for its sellers to help them “run their businesses with as little disruption as possible” in the wake of tariffs and changes to the de minimis exemption.
Before Trump’s “Liberation Day” tariffs took effect, Silverman said on the company’s fourth-quarter earnings call in late February that he expects Etsy to benefit from the tariffs and de minimis restrictions because it “has much less dependence on products coming in from China.”
“We’re doing whatever work we can do to anticipate and prepare for come what may,” Silverman said at the time. “In general, though, I think Etsy will be more resilient than many of our competitors in these situations.”
Still, American shoppers may face higher prices on Etsy as U.S. businesses that source their products or components from China pass some of those costs on to consumers.
Etsy shares are down 17% this year, slightly more than the Nasdaq.
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