Facebook parent company Meta on Thursday was hit with a major investigation from the European Union into alleged breaches of the bloc’s strict online content law over child safety risks.

The European Commission, the EU’s executive body, said in a statement that it is investigating whether the social media giant’s Facebook and Instagram platforms “may stimulate behavioural addictions in children, as well as create so-called ‘rabbit-hole effects’.”

The Commission added that it is concerned about age verifications on Meta’s platforms, as well as privacy risks linked to the company’s recommendation algorithms.

“We want young people to have safe, age-appropriate experiences online and have spent a decade developing more than 50 tools and policies designed to protect them,” a Meta spokesperson told CNBC by email.

“This is a challenge the whole industry is facing, and we look forward to sharing details of our work with the European Commission.”

The Commission said that its decision to initiate an investigation comes of the back of a preliminary analysis of risk assessment report provided by Meta in September 2023.

Thierry Breton, the EU’s commissioner for internal market, said in a statement that the regulator is “not convinced [that Meta] has done enough to comply with the DSA obligations to mitigate the risks of negative effects to the physical and mental health of young Europeans on its platforms.”

The EU said it will carry out an in-depth investigation into Meta’s child protection measures “as a matter of priority.” The bloc can continue to gather evidence via requests for information, interviews, or inspections.

The initiation of a DSA probe allows the EU to take further enforcement steps, including interim measures and non-compliance decisions, the Commission said. The Commission added it can also consider commitments made by Meta to remedy its concerns.

Meta and fellow U.S. tech giants have been increasingly finding themselves in the spotlight of EU scrutiny since the introduction of the bloc’s landmark Digital Services Act, a ground-breaking law from the European Commission seeking to tackle harmful content.

Under the EU’s DSA, companies can be fined up to 6% of their global annual revenues for violations. The bloc is yet to issue fines to any tech giants under its new law.

In December 2023, the EU opened infringement proceedings into X, the company previously known as Twitter, over suspected failure to combat content disinformation and manipulation.

The Commission is also investigating Meta over alleged infringements of the DSA related to its handling of election disinformation.

In April, the bloc launched a probe into the firm and said it’s concerned Meta hasn’t done enough to combat disinformation ahead of upcoming European Parliament elections.

The EU is not the only authority taking action against Meta over child safety concerns.

In the U.S., the attorney general of New Mexico is suing the firm over allegations that Facebook and Instagram enabled child sexual abuse, solicitation, and trafficking.

A Meta spokesperson at the time said that the company deploys “sophisticated technology” and takes other preventive steps to root out predators.

Microsoft has reportedly asked China-based cloud computing and artificial intelligence operations employees to consider relocating out of the country, as Washington cracks down on Beijing’s access to the advanced technology. 

The Wall Street Journal broke the story on Thursday, reporting that the staff, mostly comprising Chinese engineers, had been offered the opportunity to transfer to countries including the U.S., Ireland, Australia, and New Zealand, according to unnamed sources. 

One source told WSJ that Microsoft had made the offer to about 700 to 800 people in total who were involved in machine learning and other work related to cloud computing. 

CNBC could not independently verify the report.

In a statement shared with CNBC, a Microsoft spokesperson confirmed that the company had “shared an optional internal transfer opportunity with a subset of employees” without supplying details on the number and affiliation of staff affected.

“We remain committed to the region and will continue to operate in this and other markets where we have a presence,” the spokesperson said, adding that the potential transfers would not impact operations.

Microsoft employs roughly 7,000 engineers for its Asia-Pacific research-and-development group, with most of this workforce based in China, the WSJ reports.

The move comes amid U.S. efforts to prevent China from developing cutting-edge AI technology, which could be used for military purposes. In the past two years, the U.S. has placed waves of restrictions on China limiting its ability to buy advanced chips and chip-making equipment that can be deployed to train AI models. 

Now, the Biden administration is looking to place new guardrails on the export of advanced AI models, such as the large language model that powers Microsoft-backed ChatGPT, according to recent reports. 

There is currently little government oversight stopping companies like Microsoft, one of the U.S.’s largest cloud-computing and AI players, from selling or offering AI model services to foreign entities. 

The U.S. reportedly fears that AI models, which mine vast amounts of data to generate content, could be used for cyber attacks or to create biological weapons.

Earlier this year, Microsoft released a report stating that state-backed hackers from Russia, China, and Iran had been using tools from OpenAI to hone their skills and support their hacking campaigns. 

Microsoft has been deeply ingrained in China for more than three decades, even as other Western tech companies were pushed out by strict regulation. The company says that China is home to its largest R&D center outside of the U.S.

Read the full report from Wall Street Journal.

India offers a “very favorable” environment for companies to launch initial public offerings, said Shailendra Singh, managing director at Peak XV Partners, formerly Sequoia Capital India & Southeast Asia.

“My general view is, especially in Indian public markets, the regulatory framework, what Securities and Exchange Board of India does, what Reserve Bank of India does, what other regulators do is actually really good,” Singh told CNBC.

Singh, who has been at the VC firm for 18 years and led it since 2011, said India has created “a very favorable environment” for companies to list there. “It’s both safe and dynamic in India for a young company to be able to go public.”

There were 220 IPOs in India last year, up 48% from 2022, making it the second-largest IPO market in the world, according to an EY report. Though Mainland China took the top spot, the number of IPOs there slid 29% to 302.

The Indian IPO market is set to remain strong in 2024, buoyed by optimistic investor sentiment, a robust economy, and expectations of lower inflation and rate cuts, EY said.

“The Indian capital markets have evolved quite a bit. The markets have deepened in terms of liquidity. There’s lots of interest in tech companies coming up because … we are beginning to see a large number of companies with triple-digit million revenues and profits,” Singh said.

India is emerging as a bright spot amid global macroeconomic uncertainty, mainly driven by optimism over the country’s resilient economic fundamentals, KPMG said last month in its report “IPOs in India.”

On why some Indian firms prefer to list locally, Singh said: “Founders are realizing that the U.S. markets may not always understand Indian companies.”

As many as 20 companies including Zomato and Mamaearth in Peak XV’s portfolio have listed via IPOs, the firm said. Peak XV Partners, one of Asia’s largest tech investors, manages $9 billion in assets.

In June, Sequoia divided its global partnership into three independent units, namely Sequoia Capital in the U.S. and Europe, Peak XV Partners in India and Southeast Asia and HongShan in China.

The venture capital firm has invested in more than 400 companies across the technology, software, financial services and consumer sectors including India’s fintech firm Pine Labs, Indonesian coffee chain Kopi Kenangan, Singapore-based online marketplace Carousell and edtech companies Byju’s and Unacademy.