EU Lawmakers Alarmed by Microsoft's 15-Million Euro Investment in French Tech Startup Mistral AI

Quincy Jon, Tech Times 27 February 2024, 03:02 pm

Microsoft's partnership with French tech firm Mistral AI has prompted EU legislators to call for a probe into what they see as a monoply.

EU antitrust authorities are already examining Microsoft's collaboration with OpenAI, the creator of ChatGPT, with the European Commission expressing concerns about potential breaches of European Union competition rules.

On Monday, Feb. 27, Microsoft surprised many by revealing a 15-million euro ($16 million) investment in Mistral, an artificial intelligence (AI) company based in Paris. The announcement included plans to make Mistral's AI models accessible through Microsoft's Azure cloud computing platform, according to Reuters.

Initially, a Microsoft spokesperson asserted that the investment did not entail a stake in Mistral. However, Microsoft later clarified that the investment would convert into equity in Mistral's next funding round, a common practice among major tech firms investing in AI startups without specifying a valuation.

Last December, Mistral was valued at two billion euros by investors such as Andreessen Horowitz and Lightspeed in a funding round.

(Photo : JOSEP LAGO/AFP via Getty Images)People visit the US technology company Microsoft's stand during the Mobile World Congress (MWC), the telecom industry's biggest annual gathering, in Barcelona on February 26, 2024.

Mistral Lobbied For Exemptions From Regulations

In an investigation of its multi-billion-dollar investment in OpenAI last year, Microsoft reiterated that it did not control the business. The tech giant invested in OpenAI and received access to its sophisticated models and earnings, which are under antitrust examination in the EU and US.

Brussels, which spent last year developing its comprehensive AI Act, is concerned about the Mistral purchase because the firm lobbied behind closed doors for exemptions for certain AI systems, arguing that overly strict regulations could hinder European startups' ability to compete with US-based counterparts. Some politicians doubt Mistral's motivations for the Microsoft deal.

Brando Benefei, an MEP overseeing the drafting of the AI Act, commented, "What is emerging shows even more that it was good not to water down our ambition on the safety of GPAI (general-purpose AI) models with systemic risks, following legitimate but strong lobbying from companies like Mistral."

France, along with Germany and Italy, advocated for exemptions for companies developing generative AI models to shield European startups like Mistral from excessive regulation. Some lawmakers are now doubting whether US-influenced big-tech lobbying had an impact on this advocacy.

Alexandra Geese, another MEP, raised legitimate questions about Mistral and the French government's behavior during the negotiations, calling for an investigation due to the perceived concentration of money and power.

Microsoft Committs AI Assets For The Benefit of Millions

In a separate development, Microsoft has officially introduced the AI Access Principles, encompassing 11 overarching initiatives aimed at enabling individuals and organizations globally to utilize Microsoft's AI assets and AI in general for the greater good.

Brad Smith, Microsoft's Vice Chair and President, unveiled the principles at the Mobile World Congress in Barcelona. These principles provide context for Microsoft's recent initiatives and investments in Europe, including $5.6 billion in new AI data center investments and AI skilling initiatives benefiting over a million people.

The principles focus on expanding Microsoft's AI assets and infrastructure accessibility and committing to socially responsible initiatives, including environmentally focused management systems for AI data centers' energy consumption, as reported by TechTimes.

Furthermore, Microsoft has unveiled plans to inject a substantial €3.2 billion ($3.44 billion) into Germany's AI sector over the next two years. This significant investment, Microsoft's largest direct commitment to Germany in four decades, reflects the firm's confidence in Europe's largest economy, especially as it grapples with its most significant economic downturn in 20 years.