Microsoft’s multibillion-dollar investment in OpenAI could face EU merger probe

Published

2 years ago

January 9, 2024

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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 FTC and the UK's CMA are examining Microsoft's investment in OpenAI

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

Technology

Google and Disney reach deal to restore ESPN, ABC to YouTube TV

Published

8 hours ago

November 15, 2025

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Google and Disney reach deal to restore ESPN, ABC to YouTube TV

Alphabet and Disney on Friday announced that they’ve reached a deal to restore content from ABC and ESPN onto Google’s YouTube TV.

The deal comes after a two-week standoff between the two companies that started on Oct. 31. The stalemate resulted in numerous live sporting events, including college football games and two Monday Night Football games, being absent from the popular streaming service.

“We’re happy to share that we’ve reached an agreement with Disney that preserves the value of our service for our subscribers and future flexibility in our offers,” YouTube said in a statement. “Subscribers should see channels including ABC, ESPN and FX returning to their service over the course of the day, as well as any recordings that were previously in their Library. We apologize for the disruption and appreciate our subscribers’ patience as we negotiated on their behalf.”

Disney Entertainment’s co-chairs Alan Bergman and Dana Walden, along with ESPN Chairman Jimmy Pitaro, said in a statement that said the agreement reflects “how audiences choose to watch” entertainment.

“We are pleased that our networks have been restored in time for fans to enjoy the many great programming options this weekend, including college football,” they said.

More than 20 Disney-owned channels were removed from YouTube TV, which offered its subscribers $20 credits this week due to the dispute. In addition to ABC and ESPN, other networks that were unavailable included FX, NatGeo, Disney Channel and Freeform.

The main sticking point between the two companies was the rate Disney charges YouTube TV for its networks. Disney’s most valuable channel, ESPN, charges carriage of more than $10 a month per pay-TV subscriber, a higher fee than any other network in the U.S., CNBC previously reported.

It’s not the first conflict this year between YouTube and legacy media.

NBCUniversal content was nearly removed from YouTube TV before the companies reached an agreement in October, preventing shows like “Sunday Night Football” and “America’s Got Talent” from being pulled.

YouTube TV also found itself in a standoff with Fox in August that almost resulted in Fox News, Fox Sports and other Fox channels going dark on the service just before the start of the college football season. The two sides were able to strike a deal to prevent a blackout.

YouTube said it has the option for future program packages with Disney and other partners.

Disney said that access to a selection of live and on-demand programming from ESPN Unlimited, which includes content from ESPN+ and new content on its all-inclusive digital service coming later this year, will be available on YouTube TV to base plan subscribers at no additional cost by the end of 2026.

Here’s the memo that Disney executives sent to employees:

Team,

We’re pleased to share that we’ve reached a new agreement with YouTube TV, and all of our stations and networks are in the process of being restored to the service.

While this was a challenging moment, it ultimately led to a strong outcome for both consumers and for our company, with a deal that recognizes the tremendous value of the high-quality entertainment, sports, and news that fans have come to expect from Disney.

Over the past few years, we’ve led the way in creating innovative deals with key partners –
each one unique, and each designed to recognize the full value of our programming. This new agreement reflects that same creativity and commitment to doing what’s best for both our audiences and our business.

We’re proud of the work that went into this deal and grateful to everyone who helped make it happen — especially Sean Breen, Jimmy Zasowski, and the Platform Distribution team for their tireless commitment throughout this process.

Thank you all for your patience and professionalism over the past several weeks. As you all know, the media landscape continues to evolve quickly, which makes these types of negotiations complex. What hasn’t changed is our focus on the viewer. Our priority is — and will always be — delivering the best experiences and the best value to fans, and we’ll continue working closely with our partners to ensure we’re fulfilling that mission for our audiences.

We’re incredibly optimistic about what’s ahead and grateful to all of you for continuing to set the standard for entertainment around the world.

Alan, Dana & Jimmy

Disclosure: Comcast is the parent company of NBCUniversal, which owns CNBC. Versant would become the new parent company of CNBC upon Comcast’s planned spinoff of Versant.

WATCH: Google has a lot more leverage over Disney in their carriage fight: LightShed’s Rich Greenfield

Technology

We’re looking to further trim this drug stock and exit this entertainment giant

Published

16 hours ago

November 14, 2025

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We're looking to further trim this drug stock and exit this entertainment giant

Technology

JPMorgan Chase wins fight with fintech firms over fees to access customer data

Published

17 hours ago

November 14, 2025

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JPMorgan Chase wins fight with fintech firms over fees to access customer data

An exterior view of the new JPMorgan Chase global headquarters building at 270 Park Avenue on Nov. 13, 2025 in New York City.

Angela Weiss | AFP | Getty Images

JPMorgan Chase has secured deals ensuring it will get paid by the fintech firms responsible for nearly all the data requests made by third-party apps connected to customer bank accounts, CNBC has learned.

The bank has signed updated contracts with fintech middlemen that make up more than 95% of the data pulls on its systems, including Plaid, Yodlee, Morningstar and Akoya, according to JPMorgan spokesman Drew Pusateri.

“We’ve come to agreements that will make the open banking ecosystem safer and more sustainable and allow customers to continue reliably and securely accessing their favorite financial products,” Pusateri said in a statement. “The free market worked.”

The milestone is the latest twist in a long-running dispute between traditional banks and the fintech industry over access to customer accounts. For years, middlemen like Plaid paid nothing to tap bank systems when a customer wanted to use a fintech app like Robinhood to draw funds or check balances.

That dynamic appeared to be enshrined in law in late 2024 when the Biden-era Consumer Financial Protection Bureau finalized what is known as the “open-banking rule” requiring banks to share customer data with other financial firms at no cost.

But banks sued to prevent the CFPB rule from taking hold and seemed to gain the upper hand in May after the Trump administration asked a federal court to vacate the rule.

Soon after, JPMorgan — the largest U.S. bank by assets, deposits and branches — reportedly told the middlemen that it would start charging what amounts to hundreds of millions of dollars for access to its customer data.

In response, fintech, crypto and venture capital executives argued that the bank was engaging in “anti-competitive, rent-seeking behavior” that would hurt innovation and consumers’ ability to use popular apps.

After weeks of negotiations between JPMorgan and the middlemen, the bank agreed to lower pricing than it originally proposed, while the fintech middlemen won concessions regarding the servicing of data requests, according to people with knowledge of the talks.

Fintech firms preferred the certainty of locking in data-sharing rates because it is unclear whether the current CFPB, which is in the process of revising the open-banking rule, will favor banks or fintechs, according to a venture capital investor who asked for anonymity to discuss his portfolio companies.

The bank and the fintech firms declined to disclose details about their contracts, including how much the middlemen agreed to pay and how long the deals were in force.

Wider impact

The deals mark a shift in the power dynamic between banks, middlemen and the fintech apps that are increasingly threatening incumbents. More banks are likely to begin charging fintechs for access to their systems, according to industry observers.

“JPMorgan tends to be a trendsetter. They’re sort of the leader of the pack, so it’s fair to expect that the rest of the major banks will follow,” said Brian Shearer, director of competition and regulatory policy at the Vanderbilt Policy Accelerator.

Shearer, who worked at the CFPB under former director Rohit Chopra, said he was worried that the development would create a barrier of entry to nascent startups and ultimately result in higher costs for consumers.

Source: Robinhood

Proponents of the 2024 CFPB rule said it gave consumers control over their financial data and encouraged competition and innovation. Banks including JPMorgan said it exposed them to fraud and unfairly saddled them with the rising costs of maintaining systems increasingly tapped by the middlemen and their clients.

When Plaid’s deal with JPMorgan was announced in September, the companies issued a dual press release emphasizing the continuity it provided for customers.

But the industry group that Plaid is a part of has harshly criticized the development, signaling that while JPMorgan has won a decisive battle, the ongoing skirmish may yet play out in courts and in the public.

“Introducing prohibitive tolls is anti-competitive, anti-innovation, and flies in the face of the plain reading of the law,” said Penny Lee, CEO of the Financial Technology Association, told CNBC in response to the JPMorgan milestone.

“These agreements are not the free market at work, but rather big banks using their market position to capitalize on regulatory uncertainty,” Lee said. “We urge the Trump Administration to uphold the law by maintaining the existing prohibition on data access fees.”