The European Commission has issued a stern warning to Microsoft, demanding crucial information about its AI tools by May 27. Failure to comply will result in a massive fine, potentially running into billions of dollars. The commission seeks data on the risks associated with Microsoft's generative AI tools, including Copilot in Bing and Image Creator by Designer.

The EU suspects that Microsoft's Bing may have violated the Digital Service Act (DSA) by neglecting to conduct a thorough risk assessment and implement mitigation measures. This includes potential risks related to AI hallucinations, deep fakes, and automated services that could deceive election voters. According to the DSA, providers of very large online platforms and search engines must diligently identify, analyze, and assess systemic risks and implement reasonable mitigation measures.

If Microsoft fails to provide the required information or provides incomplete or incorrect data, the EU Commission will impose a 1% fine on the company's annual income or global turnover, along with a 5% periodic penalty from Bing's average daily income. With Microsoft's annual revenue standing at $211 billion last year, the fine could be substantial.

The EU Commission has been investigating tech giants, including Microsoft, Google, Meta, Snap, TikTok, and X, to assess their handling of generative AI risks. The commission has already sent official requests for information to these companies, labeling them as very large online platforms (VLOPs) that must comply with risk assessment and mitigation measures. Microsoft has yet to issue an official response, but the clock is ticking, and the stakes are high.