UK antitrust regulator to investigate Microsoft's partnership with OpenAI
What's the story
The UK's Competition and Markets Authority (CMA) is set to examine the partnership between Microsoft and OpenAI. It seeks to determine if the collaboration has led to an "acquisition of control" or created a relevant merger situation. This comes after Microsoft's commitment to invest over $10 billion in the AI research lab, owning 49% of the company, and recent changes in OpenAI's leadership and governance.
Details
Microsoft's non-voting observer position on OpenAI board
OpenAI's reinstated CEO Sam Altman announced on November 29 that Microsoft would hold a non-voting, observer position on OpenAI's board, giving it access to confidential information without voting rights. In response, the CMA has issued an Invitation to Comment (ITC) to parties and interested third parties to evaluate the potential impact of the Microsoft-OpenAI partnership on competition and whether it has resulted in a relevant merger situation. The ITC is a part of CMA's information-gathering process.
Twitter Post
CMA seeks views on Microsoft's partnership with OpenAI
CMA seeks views on Microsoft’s partnership with OpenAI.
— Competition & Markets Authority (@CMAgovUK) December 8, 2023
Read more: https://t.co/lAh8eAdHsx
What Next?
CMA's concerns over material influence and competition
The CMA's investigation aims to find out if the partnership has given one party significant influence over the other and its potential effects on competition within the industry. The outcome of this review could have major implications for both Microsoft and OpenAI, as well as their ongoing collaboration in artificial intelligence research and development.
Insights
CMA has already clashed with Microsoft once this year
The CMA already locked its horns with Microsoft earlier this year, by initially blocking its acquisition of the Call of Duty game producer - Activision Blizzard. Eventually, Microsoft revised the deal, agreeing to divest cloud gaming rights outside Europe to Ubisoft, a French competitor, to address the concerns raised by the CMA.