Regulators in the UK and US have launched preliminary investigations into the relationship between OpenAI and Microsoft, citing concerns over potential impacts on competition. The UK’s Competition and Markets Authority (CMA) announced on December 8 that it would be conducting an initial review, examining whether Microsoft’s significant investment in OpenAI amounts to an acquisition of control. The US Federal Trade Commission (FTC) is also reportedly set to investigate.
The scrutiny stems from recent changes in OpenAI’s leadership structure, including the abrupt removal of CEO Sam Altman and co-founder Greg Brockman. Altman was later reinstated as CEO, bringing about changes on the OpenAI board, including a non-voting seat for Microsoft. Microsoft currently holds a 49% stake in OpenAI’s for-profit arm and has invested over $13 billion in the company, with a substantial amount in 2023 alone.
The close relationship between the two companies has raised concerns among regulators, who are investigating whether it constitutes a merger that could potentially violate antitrust laws. Both the CMA and FTC are in the preliminary stages of their investigations and have issued invitations to comment, giving OpenAI and Microsoft the opportunity to present their cases. Third parties are also encouraged to express their concerns about the relationship and its potential impact on the AI market.
The CMA’s Sorcha O’Carroll explained that the invitation to comment is part of the information-gathering process and will precede any formal antitrust probe. The investigations by both regulatory bodies could potentially result in further action if antitrust violations are identified.
It remains to be seen how OpenAI and Microsoft will navigate these regulatory challenges and whether any changes will be required to address the concerns about competition in the AI market. As the investigations progress, the tech industry will be watching closely to see how regulators approach the nuanced relationship between OpenAI and Microsoft.
