CMA clears probe into Microsoft’s OpenAI investment
After months of scrutiny, Microsoft’s $13bn (£11bn) partnership with OpenAI has been cleared by the UK’s Competition and Markets Authority (CMA).
The antitrust watchdog ruled that Microsoft‘s investment did not meet the threshold for a full-scale merger investigation, despite concerns over the tech giant’s influence on the AI startup.
The CMA acknowledged that Microsoft gained “material influence” over OpenAI through its initial 2019 investment.
Yet, it determined that it had not acquired “de facto control,” meaning it wasn’t effectively running the firm or dictating its decisions.
As a result, the deal did not qualify for review under UK merger laws.
However, the regulator emphasised that this decision does not mean there are no competition concerns surrounding the partnership.
A Microsoft spokesperson stated: “Our partnership with OpenAI promotes competition, innovation and responsible AI development. We welcome the CMA’s conclusion, after careful and prudent consideration, to close its investigation”.
While the UK has dropped its probe, Microsoft still faces scrutiny from regulators across the pond.
The US Federal Trade commission recently raised concerns that its investment in OpenAI could strengthen its dominance in cloud computing, giving it excessive influence in the market.
More broadly, the CMA has been investigating ties between major tech firms and AI startups through partnerships such as Microsoft and Mistral AI, Amazon and Anthropic, and Google’s ties to Anthropic too.
None have yet met the threshold needed for a full investigation under the UK’s merger laws.
While the watchdog recently gained new powers to investigate tech titans with “strategic market status”, reported Reuters, the recent appointment of ex Amazon Doug Gurr as interim chair has led analysts to speculate a softer stance on dealmaking in the future.