Microsoft's multi-year partnership with Mistral AI has drawn the attention of European regulators amid concerns about the scope of the deal between the two companies.
The partnership, officially launched this week, will allow Mistral AI to access Microsoft's Azure and cloud-based AI infrastructure, which in turn will assist the development and deployment of future Mistral Large Language Models (LLMs).
The deal also represents an opportunity for Mistral AI to “unlock new business opportunities,” Microsoft said, through greater access to global markets.
Microsoft revealed that the partnership will focus on three key areas, including the possibility of Mistral leveraging the tech giant's Azure AI supercomputing infrastructure to improve model scale and performance.
Microsoft will also expand Mistral's current offerings to the market, making its premium offerings available to customers in the Azure AI studio and Azure Machine Learning model catalog, allowing Mistral to “promote, sell and distribute its models to Microsoft customers around the world.
The partnership will enable collaborative research and development, as companies experiment with testing and training purpose-built models for different customer bases, including “European public sector workloads.”
Mistral AI CEO Arthur Mensch hailed the partnership as a “huge milestone” for the French startup. In recent months, the company has positioned itself as one of the main European contenders against the American dominance in generative AI.
Last year, Mensch set himself the goal of “creating a European champion” capable of competing with OpenAI and other major industry players.
But while the partnership with Microsoft could represent an important seal of approval for the company, EU regulators have raised concerns about the scope of the deal.
Union lawmakers appear to have come under fire for the announcement, and concerns have already been raised about Microsoft's investment in the company.
“The Commission is studying the agreements that have been concluded between the large players in the digital market and the developers and providers of generative AI,” a European Commission spokesperson said. political. “In this context, we have received the aforementioned agreement, which we will analyze.”
Initially, it was revealed that the tech giant had pledged $16 million in funding for the Paris-based startup. But confusion arose over this after a Microsoft spokesperson said Reuters who had invested in the company without any participation.
Microsoft later clarified that the investment would be converted to equity in an upcoming fundraising.
Alex Haffner, competition partner at British law firm Fladgate, said a key talking point for regulators in this case is the “extent of Microsoft's minority interest” in Mistral.
“EU merger control rules only affect whether one party acquires 'decisive influence' over another, which essentially means that it has the ability to influence the target's corporate behavior through its rights as a shareholder or otherwise through any related contractual means,” he said. .
Haffner added that lawmakers will be interested in establishing the full scope of the relationship between the two companies following the deal.
“The likely initial question that European policymakers will focus on is how the new deal works in practice and, more specifically, what rights Microsoft has acquired over Mistral in the context of the EU merger control framework/rules.”
Microsoft is no stranger to regulatory scrutiny
Microsoft's relationship with partners in the generative AI space, specifically OpenAI, has been a source of controversy in recent months.
In late 2023, competition regulators in the UK, US and EU opened preliminary investigations into the relationship between the two companies amid concerns that the alliance could harm competition in the artificial intelligence market ( AI).
A key factor in these investigations is the scale of Microsoft's control over OpenAI's activities. The UK's Competition and Markets Authority (CMA) has expressed concern over whether Microsoft's multi-million pound investment in OpenAI amounts to a “takeover”.
Similar views were noted by both the Federal Trade Commission (FTC) and EU merger regulators, both of which noted that the recent controversy surrounding the ouster of OpenAI CEO Sam Altman and subsequent inclusion of Microsoft figures on the board of directors, raise more questions about the scope of control. .
