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Microsoft’s Investment in Mistral AI Raises Scrutiny from European Union

Brussels, February 27, 2024, The Europe Today: Microsoft’s recent partnership and investment deal with the French tech startup Mistral AI have come under scrutiny within the European Union, prompting the European Commission to announce a thorough analysis of the arrangement as part of its ongoing assessment of big tech’s AI partnerships.

On Monday, Microsoft publicly disclosed its plan to offer Mistral AI’s advanced artificial intelligence (AI) models on its Azure cloud computing platform. The tech giant also revealed a significant financial commitment, stating that it had made a 15 million euro investment in Mistral AI. Microsoft clarified that this investment would convert into equity in Mistral AI during the company’s next funding round.

A Microsoft spokesperson explained, “We’ve made a 15 million euro investment in Mistral AI which would convert into equity in the company’s next funding round.” Notably, Microsoft emphasized that it currently holds no equity in Mistral AI.

The announcement has triggered concerns and raised eyebrows in Brussels, especially in the context of ongoing negotiations over the European Union’s comprehensive AI Act. Mistral AI had reportedly lobbied for more lenient rules for certain AI models during these negotiations. Advocates for stricter regulations on AI expressed concerns that relaxed rules could potentially undermine European companies’ ability to compete with major tech players.

The European Commission, responsible for overseeing such matters, informed Reuters on Tuesday that it would scrutinize the Microsoft-Mistral deal as part of its continuous assessment of AI collaborations involving major tech companies. This development follows the EU’s executive arm’s prior caution regarding Microsoft’s support for the U.S.-based OpenAI, hinting that such collaborations might be subject to EU merger rules.

Brando Benefei, a Member of the European Parliament who played a key role in drafting the bloc’s landmark AI Act, commented on the emerging situation, saying, “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. This story that is emerging will need to be further investigated.”

The European Union remains vigilant in ensuring that AI partnerships align with the regulatory frameworks in place, and the scrutiny of the Microsoft-Mistral AI deal exemplifies the commitment to maintain a balance between technological innovation and the safeguarding of European interests.