The UK’s Competition and Markets Authority (CMA) is investigating whether the partnership between Microsoft and OpenAI poses a threat to competition. In a press release issued on Friday (Dec. 8), the CMA stated that it aims to determine if recent developments have resulted in a merger situation and if such a merger could impact competition within the UK. The CMA has released an Invitation to Comment (ITC), which allows Microsoft, OpenAI, and interested third parties to provide their input on the matter before the regulator decides whether to launch a formal phase 1 investigation. The CMA’s senior director for mergers, Sorcha O’Carroll, emphasized that the invitation to comment is part of the information gathering process, and any phase 1 investigation would only commence after the CMA has obtained the necessary information from the partnership parties.
The CMA’s interest in this partnership stems from changes in OpenAI’s governance, some of which involve Microsoft. The regulator wants to review if the Microsoft-OpenAI partnership has led to one entity acquiring control over another. Additionally, the CMA is monitoring the impact of partnerships and strategic agreements within the artificial intelligence (AI) industry, particularly evaluating if these arrangements could weaken competition in the development or use of foundation models (FMs).
Given the breakneck speed at which AI is advancing, this investigation is of vital importance. The CMA’s press release highlights the significance of sustained competition among developers for the technology’s development and distribution. The partnership between Microsoft and OpenAI, encompassing substantial investments, collaboration in technology development, and Microsoft’s exclusive provision of cloud services to OpenAI, establishes a close and multifaceted relationship between two firms heavily involved in FMs and related markets.
As the CMA delves into this investigation, it is clear that they are determined to safeguard competition and ensure that the development of AI technology remains competitive and beneficial to all stakeholders. Stakeholders, including Microsoft, OpenAI, and interested third parties, now have the opportunity to present their thoughts and insights through the Invitation to Comment. The outcome of this investigation could have significant consequences for the future of AI development and competition within the UK and beyond.
