The UK’s competition watchdog, the Competition and Markets Authority (CMA), has initiated a review into the partnership between Microsoft and OpenAI, the developer of artificial intelligence language model ChatGPT. The CMA has called for comments on whether the partnership has resulted in an acquisition of control following recent leadership upheavals at OpenAI. The company, originally established as a non-profit entity, has a commercial unit that is controlled by its board, with Microsoft being the largest investor. The CMA’s move comes after OpenAI ousted and rehired its chief executive, Sam Altman, and formed a new board. Microsoft also holds a non-voting observer seat on the OpenAI board. The CMA is particularly interested in understanding any changes made to the partnership and whether they have any implications for competition in the AI sector. Comments from interested parties will be reviewed by the CMA, which could launch a formal investigation if deemed necessary.
The CMA has highlighted the significance of the partnership, which involves multi-year, multi-billion dollar investment and collaboration in technology development, particularly in the area of AI foundation models. These models form the basis of chatbots like ChatGPT, which are widely used in products such as Microsoft’s Bing search engine. The CMA has been closely monitoring the market for foundation models for potential competition or consumer protection issues.
Microsoft’s CEO, Satya Nadella, had expressed surprise at the decision to oust Sam Altman, stating that his company had not been consulted. He also emphasized the importance of Microsoft’s deep partnership with OpenAI in realizing the latter’s mission. Microsoft has invested $13 billion in OpenAI and considers the partnership integral to fostering AI innovation and competition.
The CMA’s invitation for comments is the first step in its information-gathering process. Sorcha O’Carroll, Senior Director for Mergers at the CMA, clarified that it precedes any phase one investigation, which can only be initiated after the CMA has received necessary information from the partnership parties.
This review by the CMA reflects wider considerations of AI sector regulation being explored by UK authorities. The fallout from the recent leadership changes and the subsequent impact on the Microsoft-OpenAI partnership has prompted the CMA to seek further insights and assess the potential implications for competition.
