The UK’s Competition and Markets Authority (CMA) has launched an inquiry into the corporate relationship between Microsoft and OpenAI, aiming to determine if the tie-up represents a merger between the two companies. The investigation will examine whether this partnership could potentially impact competition in the AI development sector in the UK on an antitrust level. The CMA has invited comments from Microsoft, OpenAI, and other interested parties regarding the potential consequences of the collaboration on sustained competition in the AI industry, with a particular focus on the development and use of foundational AI models.
This move comes in light of the UK regulator’s concerns over the nature of the Microsoft-OpenAI partnership, especially following recent developments at OpenAI. The abrupt removal and subsequent re-hiring of CEO Sam Altman, along with subsequent board changes and the granting of a non-voting observer seat to Microsoft, have raised questions about the level of control Microsoft has over OpenAI. Consequently, the CMA will concurrently examine the extent of Microsoft’s influence and control over OpenAI within the context of their partnership.
The US Federal Trade Commission (FTC) is also reportedly investigating whether Microsoft’s investment in OpenAI violates antitrust laws. Both regulators are aiming to ensure that competition in the AI market is not compromised, allowing for continued innovation and growth in the industry. Meanwhile, Microsoft has emphasized that the companies remain independent, with Microsoft President Brad Smith stating that the only change in their relationship is the non-voting observer position on OpenAI’s board. The company plans to cooperate fully with the CMA’s inquiry.
The CMA has indicated that it may proactively seek input from other companies involved in the AI space during the inquiry process. An invitation to comment has been extended to interested parties, who have until January 3 to provide their input. The CMA will then assess the information gathered to determine if a larger investigation is warranted. The regulator’s ultimate goal is to safeguard sustained competition in the AI industry, making certain that partnerships and agreements do not undermine competition in the development or use of foundational AI models.
As this scrutiny unfolds, the outcome will shed light on the deepening collaboration between Microsoft and OpenAI, determining the level of control Microsoft exercises over OpenAI and the potential impact on competition and innovation in the AI market.