UK Regulator Investigates Microsoft’s Collaboration with OpenAI for Potential Merger Control

The UK’s Competition and Markets Authority (CMA) is examining Microsoft’s multi-billion dollar collaboration with OpenAI to determine if it constitutes an acquisition of control. Microsoft’s announcement that it would hold a non-voting board seat in OpenAI triggered the investigation. The CMA is concerned about the potential substantial influence one party may have over the other. Microsoft responded by clarifying that it only plays an observer role on the board and does not have voting rights. The CMA will assess if the collaboration has resulted in a relevant merger situation and its potential impact on competition. This marks the second time this year that the CMA has scrutinized Microsoft’s operations. The tech giant has pledged a significant investment in OpenAI and plans to invest heavily in artificial intelligence in the United Kingdom. Microsoft’s Vice Chair and President, Brad Smith, stated that the collaboration does not involve an acquisition like Google’s purchase of DeepMind. The company is prepared to cooperate with the CMA as the investigation progresses.