(Bloomberg) -- Microsoft Corp.’s Mistral AI investment is set to be analyzed by the European Union’s competition watchdog at the same time that its deep ties to OpenAI Inc come under regulatory scrutiny.

Mistral announced a “strategic partnership” with Microsoft on Monday that includes making the startup’s latest artificial intelligence models available to customers of Microsoft’s Azure cloud. Microsoft said the investment amounted to €15 million ($16.3 million.)

Mistral develops algorithmic models similar to those from OpenAI used for chatbots and other AI services, but Mistral models are shared openly. Microsoft’s investments will convert into equity as part of Mistral’s next funding round. 

Microsoft didn’t immediately respond to a request for comment. Mistral AI declined to comment. 

In artificial intelligence, Microsoft has worked mostly with OpenAI, investing roughly $13 billion in the California startup. That relationship is now under scrutiny from regulators in the UK and EU. 

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A European Commission spokesperson said Tuesday that regulators will analyze Microsoft’s investment into Mistral AI, after having received a copy of the agreement. The move could eventually lead to a formal investigation, potentially scuppering Microsoft’s plans. 

--With assistance from Mark Bergen.

(Updates with Mistral response in fourth paragraph.)

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