Microsoft and OpenAI Face Merger Probe by UK Competition Authority

The Competition and Markets Authority (CMA) in the UK has launched an inquiry into whether the partnership between Microsoft and OpenAI constitutes a relevant merger situation. This comes after the recent management drama at OpenAI, which saw co-founder Sam Altman reinstated and Microsoft gaining a seat on the board. The CMA’s investigation will assess the impact of this new relationship on competition within the market. Both companies have been invited to provide feedback, along with any interested third parties. If the CMA decides to proceed with a full investigation, various criteria will be considered, including the distinctiveness of the businesses, revenue generated through their relationship, and their market share. The partnership between Microsoft and OpenAI is seen as significant in the development of artificial intelligence and foundation models, which has raised concerns about competition in the industry. With the increasing importance of AI across different sectors, the CMA aims to ensure fair competition and prevent any barriers to entry for other companies.