EU is reportedly planning to analyze Microsoft's strategic partnership with Paris-based AI startup Mistral AI over limiting customers from using competing security software.

Authorities state that the EU AI Act was altered to cater to Mistral's demands, arguing that it is difficult to compete in the global market with such regulations. 

The European Parliament reportedly expects French companies to scale up independently rather than relying on China or the US. Additionally, concerns regarding the timeline of Mistral’s discussions with Microsoft were raised. The European Union’s competition watchdog is set to investigate the deal.

Analyst QuickTake: This investigation follows Microsoft’s investment in Mistral AI of USD 16.3 million for a minority stake. This partnership supposedly was to make Mistral AI’s newly developed model available on Microsoft's Azure AI platform. Earlier this year, the European Commission initiated a competition investigation into Microsoft's multibillion-dollar i nvestment in OpenAI and also examined the competitiveness of the markets for virtual worlds and GenAI.