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Microsoft (NASDAQ:MSFT) said to the EU antitrust regulator that Alphabet’s (GOOG) (GOOGL) Google has an advantage in generative AI due to a collection of data and AI-optimized chips, Reuters reported.
The remarks made by Microsoft were in response to a consultation brought by the European Commission in January related to competition in generative AI, the report added.
Generative AI services have taken the world by storm since the launch of Microsoft-backed OpenAI’s ChatGPT in 2022. Companies worldwide have been developing their own large language models, or LLMs, which can provide services such as content and image and voice generation, to name a few.
Microsoft said in a report to the Commission that Google is the only company which is vertically integrated in a way that provides it with strength and independence at every AI layer from chips to a mobile app store. Meanwhile, other companies must rely on collaborations to innovate and compete.
The Redmond, Wash.-based tech giant added that Google’s self-supply AI semiconductors would provide it an advantage for the years to come, while its datasets from Google Search Index and YouTube helped it train its LLM Gemini.
In addition, Microsoft noted that AI-powered voice bots like Google Assistant and Apple’s (AAPL) Siri provide both companies with a competitive advantage.
New entrants and rivals of Google and Apple would not enjoy the same advantages, Microsoft added.
Meanwhile, Google also responded to Microsoft’s comments.
Google noted that it hopes the Commission’s study will shed a light on companies which do not offer openness like Google Cloud or have a history of locking-in customers. These companies are bringing the same approach to AI services.
Microsoft’s investment, which is worth over $10B, in OpenAI is potentially under the Commission’s scrutiny. The agency said in January that the company’s investment in OpenAI might be reviewable under the EU Merger Regulation.
Currently there are several AI startups which have seen funding from big tech companies.
Anthropic has Google and Amazon (AMZN) among its investors, while Canada’s Cohere has Salesforce (CRM) and Nvidia (NVDA) as investors.
French startup Mistral has seen €15M investment from Microsoft. However, this collaboration could be under the EU regulator’s lens.
“Encouraging pro-competitive partnerships in the AI space is an effective way to prevent companies from becoming vertically integrated in a manner that would result in an anticompetitive advantage,” Microsoft noted.