The EU’s competition regulator is investigating whether Microsoft’s multibillion-dollar investment in OpenAI is caught by the bloc’s merger rules, a move that could lead to a formal probe into the biggest alliance of the recent AI dealmaking frenzy.

“The European Commission is checking whether Microsoft’s investment in OpenAI might be reviewable under the EU Merger Regulation,” the commission said in a statement on Tuesday.

US and UK competition regulators are already examining Microsoft’s up to $13bn investment into OpenAI, the creator of the breakthrough chatbot ChatGPT. The alliance has become one of the tech industry’s most lucrative tie-ups as investors and Big Tech companies poured billions into AI start-ups last year.

Last month, the UK’s Competition and Markets Authority became the first competition watchdog to look into the deal between Microsoft and OpenAI since a messy corporate dispute in November at the start-up led to chief executive Sam Altman being ousted by its board before being rehired days later.

Microsoft, which alongside other investors had pushed for Altman’s reinstatement, ended up taking a non-voting observer seat on OpenAI’s board following the bust-up.

The EU’s review is a preliminary step, but if it found sufficient grounds the commission could then choose to launch a full probe into whether the investment met its regulations.

Antitrust investigations into Microsoft’s partnership with OpenAI are complicated by the unusual nature of their relationship. Despite pledging to invest billions of dollars in IT infrastructure as OpenAI’s “exclusive cloud provider”, Microsoft owns no traditional equity stake in the AI company. Instead, it is entitled to a capped share of its profits.

The commission also said it was “looking into some of the agreements that have been concluded between large digital market players and generative AI developers and providers” and “investigating the impact of these partnerships on market dynamics”.

Big Tech companies have raced to strike deals with a new crop of AI groups since ChatGPT launched in late 2022. Start-ups such as Inflection, Cohere, Anthropic and Mistral have sought access to the vast cloud computing resources and high-performance chips necessary to create large language models, the systems that underpin generative AI tools capable of creating humanlike prose and code or realistic imagery.

Over the past year, Google and Amazon have made multibillion-dollar bets on private AI companies such as Anthropic. Microsoft is also a backer of Inflection, while chipmaker Nvidia has made a series of investments in AI start-ups.

The announcement of Brussels’ studying of Microsoft’s investment comes as the EU’s competition commissioner Margrethe Vestager travels to Silicon Valley this week for meetings with leading US technology executives.

Vestager will meet senior officials at OpenAI during the trip, her office said.

“Since 2019, we’ve forged a partnership with OpenAI that has fostered more AI innovation and competition, while preserving independence for both companies,” Microsoft said. “The only thing that has changed recently is that Microsoft will now have a non-voting observer on OpenAI’s board.”

Last month, Microsoft president Brad Smith said that its relationship with OpenAI was “very different from an acquisition”.

The CMA had asked interested parties, including the companies, whether “the partnership between Microsoft and OpenAI, including recent developments, has resulted in a relevant merger situation”, with a January 3 deadline.

A coalition of civil society organisations, including the Irish Council for Civil Liberties, Article 19, Foxglove and the Mozilla Foundation, have submitted views, including a list of issues that should drive the CMA’s investigation, including “operational and strategic independence of OpenAI” and “exclusive access that Microsoft has”.

Broadcom Inc., which has been in the process of acquiring enterprise software giant VMware Inc. for 18 months, will lay off at least 401 VMware employees — 184 in Broomfield, Colo. and 217 in Atlanta — less than one week after it completed the $69 billion merger on Nov. 22.

This is merely the first wave of employees to be let go. A Broadcom representative told The New Stack that he was unaware of the total number of layoffs that would result from the merger. Broadcom enlisted 21,000 full-time employees as of October, while VMware reported 38,300 FTEs in February.

The layoffs will impact staff in several countries and across a variety of roles spanning cloud, technical, engineering and marketing functions. This is according to VMware APJ vice president of partner ecosystem and commercial organization, Uma Thana Balasingham, who received her layoff notice this week and discussed it on LinkedIn.

“My initial encounter a few years ago with redundancy was unplanned, creating a disruptive transition and a confidence hit. In contrast, my current experience at VMware allowed for more preparation, although it still carries a sense of finality — a ‘good sad’ as I call it — that’s hard to ignore,” Balasingham wrote.

San Jose, Calif.-based Broadcom’s core business is in wireless, networking, cable modem and infrastructure components, which accounts for about 75% of its $40 billion yearly income. The company’s other business segments include semiconductor solutions and licensing, which account for the remaining 25% of its revenue.

Palo Alto, Calif.-based VMware will bring a $8.5 billion business into the Broadcom fold, which already includes 40 previous acquisitions, such as Symantec, CA, Brocade and Norton LifeLock.

VMware products fill a key computing layer for companies with on-premises data centers and hybrid cloud-based computing models. The company’s software layers provide virtualization, provision, management, load balancing and other key aspects of running applications in data centers. The company is widely known for its desktop virtualization software. It has been estimated by many industry people that more than 95% of all data centers utilize at least one VMware component.

From the time the acquisition was announced in May 2022, Broadcom had informed Wall Street analysts that there would be major cuts to VMware staff; as much as $250 million in overlapping services and staff positions were identified. In that May 2022 discussion, Broadcom CEO Hock Tan outlined a strategy to increase VMware’s profitability by $3.8 billion by “eliminating duplicative general and administration functions across human resources, finance, legal, facilities and information technology.”

Adobe Inc. officials are rushing to finish a proposal to address concerns from European competition regulators who are threatening to block the company’s record $20 billion acquisition of Figma Inc., according to people familiar with the process.

The initial offer may include a commitment not to tie Figma into Adobe’s Creative Cloud package, a bundle of the company’s products, and a potential divestment of Adobe XD, which competes with Figma, said the people, who asked not to be identified because the negotiations are confidential. Lawyers and executives from both companies are preparing to fly to Brussels for Dec. 8 meetings with the European Union to discuss the proposal.

The deal, which would preserve Adobe’s top spot in the creative software market, is under threat from regulators in both the EU and UK, who have said that the planned tie up could harm competition. US regulators, who have also been reviewing the deal for more than a year, have yet to reach a final decision on whether to try to block it.

It may be hard, however, for San Jose, California-based Adobe to win over regulators, who are still smarting from not wresting more concessions in reviews of deals involving tech giants like Alphabet Inc. and Meta Platforms Inc., according to Bloomberg Intelligence analyst Jennifer Rie. The watchdogs have expressed concerns in a number of recent mergers about the effects on future innovation.

“They are really watching for that because it was missed” previously, she said. And the UK “didn’t cave” on Microsoft Corp.’s $69 billion purchase of Activision Blizzard Inc. “until after a structural remedy offer.”

Adobe didn’t immediately respond to requests for comment. San Francisco-based Figma pointed to the statement it issued Tuesday after a UK regulator said the deal would imperil competition in product design software and reduce the development of new products.

“We remain committed to the deal, confident in the facts, and convinced our proposed combination with Adobe is a win for consumers and should be approved,” Figma said.

Flexera and Snow Software have announced a definitive agreement under which Flexera intends to acquire Snow.

Worldwide IT spending could reach $5.1 trillion in 2024, according to Gartner. It is estimated that up to 32% of this spend is wasted. Together, Flexera and Snow will provide deeper visibility and greater insights into the assets, technologies, terms of licensing and usage that comprise this spend and associated risks. Flexera and Snow will offer an expanded global footprint, a powerful strategic partner network and expanded IT Asset Management (ITAM), SaaS Management and FinOps capabilities. Customers will gain precise, detailed, and dynamic views into their technology blueprint to make strategic business decisions.

The news that Broadcom’s acquisition of VMware has finally gone through, after more than a year of uncertainty, will have relieved a lot of people. Even more of a relief, though, is that we’re finally getting to see what the new organization might look like.

Listening to Broadcom boss Hock Tan at VMworld Explore earlier this month, he clearly aimed to reassure (not too surprising, given the venue!), but it actually felt as if he only spoke about VMware in one dimension – the virtual data centre, via VMware Cloud Foundation (VCF). The feel was almost of a big player buying a startup for some key piece of technology it lacks, never mind the rest of it.

Now all that has changed. In a blog celebrating the deal’s completion, Tan writes of his “apps anywhere” vision of VMware becoming ubiquitous – the foundation of every data centre, physical or virtual, and of both private and hybrid clouds. VCF is still the keystone, but he also discusses application networking and security, and explicitly calls out Tanzu as the modern apps layer for VMware customers.