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
The Hims app arranged on a smartphone in New York on Feb. 12, 2025.
Gabby Jones | Bloomberg | Getty Images
Hims & Hers Health shares closed up 5% on Tuesday after the company announced patients can access Eli Lilly‘s weight loss medication Zepbound and diabetes drug Mounjaro, as well as the generic injection liraglutide, through its platform.
Zepbound, Mounjaro and liraglutide are part of the class of weight loss medications called GLP-1s, which have exploded in popularity in recent years. Hims & Hers launched a weight loss program in late 2023, but its GLP-1 offerings have evolved as the company has contended with a volatile supply and regulatory environment.
Lilly’s weekly injections Zepbound and Mounjaro will cost patients $1,899 a month, according to the Hims & Hers website. The generic liraglutide will cost $299 a month, but it requires a daily injection and can be less effective than other GLP-1 medications.
“As we look ahead, we plan to continue to expand our weight loss offering to deliver an even more holistic, personalized experience,” Dr. Craig Primack, senior vice president of weight loss at Hims & Hers, wrote in a blog post.
A Lilly spokesperson said in a statement that the company has “no affiliation” with Hims & Hers and noted that Zepbound is available at lower costs for people who are insured for the product or for those who buy directly from the company.
In May, Hims & Hers started prescribing compounded semaglutide, the active ingredient in Novo Nordisk‘s GLP-1 weight loss medications Ozempic and Wegovy. The offering was immensely popular and helped generate more than $225 million in revenue for the company in 2024.
But compounded drugs can traditionally only be mass produced when the branded medications treatments are in shortage. The U.S. Food and Drug Administration announced in February that the shortage of semaglutide injections products had been resolved.
That meant Hims & Hers had to largely stop offering the compounded medications, though some consumers may still be able to access personalized doses if it’s clinically applicable.
During the company’s quarterly call with investors in February, Hims & Hers said its weight loss offerings will primarily consist of its oral medications and liraglutide. The company said it expects its weight loss offerings to generate at least $725 million in annual revenue, excluding contributions from compounded semaglutide.
But the company is still lobbying for compounded medications. A pop up on Hims & Hers’ website, which was viewed by CNBC, encourages users to “use your voice” and urge Congress and the FDA to preserve access to compounded treatments.
With Tuesday’s rally, Hims and Hers shares are up about 27% in 2025 after soaring 172% last year.
WATCH: Hims & Hers shares tumble over concerns around weight-loss business
Meta CEO Mark Zuckerberg holds a smartphone as he makes a keynote speech at the Meta Connect annual event at the company’s headquarters in Menlo Park, California, on Sept. 25, 2024.
Manuel Orbegozo | Reuters
Meta’s head of artificial intelligence research announced Tuesday that she will be leaving the company.
Joelle Pineau, the company’s vice president of AI research, announced her departure in a LinkedIn post, saying her last day at the social media company will be May 30.
Her departure comes at a challenging time for Meta. CEO Mark Zuckerberg has made AI a top priority, investing billions of dollars in an effort to become the market leader ahead of rivals like OpenAI and Google.
Zuckerberg has said that it is his goal for Meta to build an AI assistant with more than 1 billion users and artificial general intelligence, which is a term used to describe computers that can think and take actions comparable to humans.
“As the world undergoes significant change, as the race for AI accelerates, and as Meta prepares for its next chapter, it is time to create space for others to pursue the work,” Pineau wrote. “I will be cheering from the sidelines, knowing that you have all the ingredients needed to build the best AI systems in the world, and to responsibly bring them into the lives of billions of people.”
Vice President of AI Research and Head of FAIR at Meta Joelle Pineau attends a technology demonstration at the META research laboratory in Paris on February 7, 2025.
Stephane De Sakutin | AFP | Getty Images
Pineau was one of Meta’s top AI researchers and led the company’s fundamental AI research unit, or FAIR, since 2023. There, she oversaw the company’s cutting-edge computer science-related studies, some of which are eventually incorporated into the company’s core apps.
She joined the company in 2017 to lead Meta’s Montreal AI research lab. Pineau is also a computer science professor at McGill University, where she is a co-director of its reasoning and learning lab.
Some of the projects Pineau helped oversee include Meta’s open-source Llama family of AI models and other technologies like the PyTorch software for AI developers.
Pineau’s departure announcement comes a few weeks ahead of Meta’s LlamaCon AI conference on April 29. There, the company is expected to detail its latest version of Llama. Meta Chief Product Officer Chris Cox, to whom Pineau reported to, said in March that Llama 4 will help power AI agents, the latest craze in generative AI. The company is also expected to announce a standalone app for its Meta AI chatbot, CNBC reported in February.
“We thank Joelle for her leadership of FAIR,” a Meta spokesperson said in a statement. “She’s been an important voice for Open Source and helped push breakthroughs to advance our products and the science behind them.”
Pineau did not reveal her next role but said she “will be taking some time to observe and to reflect, before jumping into a new adventure.”
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