CMA invites comments on Microsoft and OpenAI partnership impacting UK’s competition
The UK’s competition watchdog has announced it is inviting comments on whether the partnership between Microsoft and OpenAI, the creator of Chatgpt, has “resulted in a relevant merger situation”, and if that merger could impact competition in the UK.
The Competition and Markets Authority (CMA) said on Friday that “the partnership between Microsoft and OpenAI represents a close, multi-faceted relationship between two firms with significant activities in FMs and related markets”.
The regulator has been “closely monitoring” how company relationships could lead to weaker competition in the development or use of foundation models (FMs), which are complex artificial intelligence (AI) models that process language.
It does not mean the CMA is launching a formal investigation though.
Senior director for mergers at the CMA, Sorcha O’Carroll, said: “The invitation to comment is the first part of the CMA’s information gathering process and comes in advance of launching any phase 1 investigation, which would only happen once the CMA has received the information it needs from the partnership parties.”
Microsoft has invested $10bn (£8bn) into the AI startup and, as part of the multi-year investment, OpenAI is allowed to use the tech giant’s cloud services.
But OpenAI was recently mired in crisis after a boardroom scuffle that led to the chief executive, Sam Altman, being fired and then eventually rehired again.
Microsoft got involved in the brouhaha, with chief executive Satya Nadella offering Sam Altman and OpenAI co-founder Greg Brockman roles at the company heading up a new advanced AI research team.
The regulator said it will review whether the partnership has led to one party having material influence, de facto control or more than 50 per cent of the voting rights over the other. Or, if there has been a “change in the nature of control” by one of the companies.
Vice-chair and president of Microsoft, Brad Smith, said: “Since 2019, we’ve forged a partnership with OpenAI that has fostered more AI innovation and competition while preserving independence for both companies.
“The only thing that has changed is that Microsoft will now have a non-voting observer on OpenAI’s Board, which is very different from an acquisition such as Google’s purchase of DeepMind in the UK. We will work closely with the CMA to provide all the information it needs.”
OpenAI has not responded to Morning Wire‘s request for comment.