The European Union has issued a warning to Microsoft, threatening a fine of up to 1% of its annual revenue if the company fails to respond to a request for information by May 27. This request, made under the EU's Digital Services Act, concerns Microsoft's Bing search engine and its associated generative artificial intelligence services.

The European Commission has expressed concerns about potential risks linked to Bing's generative AI features, such as "hallucinations," deepfakes, and the automated manipulation of services that could mislead voters. The initial request was sent on May 14, specifically regarding "Copilot in Bing" and "Image Creator by Designer."

Microsoft has until May 27 to provide the requested information to the Commission. If the company fails to meet the deadline, it faces not only a fine of up to 1% of its total annual income but also periodic penalties of up to 5% of its average daily income.

Given Microsoft's self-reported revenue of $211 billion for 2023, a 1% fine could amount to well over two billion dollars. If the current market trend continues, Microsoft's revenue could surpass this figure in 2024, potentially resulting in an even higher fine.

It's important to note that these fines have not yet been levied, and Microsoft has not been found guilty of violating any EU laws specifically related to this notice. The request for further information appears to be a public-facing courtesy notice, with consequences if ignored.

The European Commission's actions underscore its commitment to addressing potential risks associated with generative AI technologies and ensuring that companies operating within the EU comply with the Digital Services Act. As the use of AI continues to grow, regulatory bodies are taking proactive steps to mitigate potential harms and protect citizens from potential manipulation or misinformation.