The European competition regulator has initiated an investigation into Microsoft‘s collaboration with French AI startup Mistral AI, prompted by concerns over potential anti-competitive consequences. This scrutiny follows Microsoft’s announcement of a $16.3 million partnership with Mistral AI, in which the tech giant will provide cloud infrastructure to accelerate the startup’s language models. The deal, aimed at bolstering Microsoft’s AI offerings, has raised alarms among European lawmakers and advocacy groups, who fear it could lead to market monopolization by non-EU tech firms.
Microsoft’s significant investment in Mistral AI comes amid ongoing scrutiny of its financial involvement with San Francisco-based OpenAI. Both partnerships see Microsoft positioning Azure as the primary cloud provider, raising questions about the concentration of power in the hands of a few major players. European lawmakers, concerned about the potential erosion of digital sovereignty and the competitiveness of EU startups, view the Microsoft-Mistral AI partnership as a challenge to their regulatory efforts to foster a diverse and competitive AI landscape within the region.
Critics argue that the timing of the partnership announcement, shortly after the finalization of negotiations for the European AI Act, suggests strategic maneuvering by Microsoft. This sentiment is echoed by Zuzanna Warso of the Open Future Foundation, who sees the deal as a win for Microsoft in diversifying its model portfolio. Meanwhile, European Parliament member Kai Zenner views the partnership as a blow to the concept of digital sovereignty, highlighting the EU’s dependence on external support for startup scale-ups and the persistence of flawed policymaking narratives.
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