UK's Antitrust Investigation Explores OpenAI's Ongoing Partnership with Microsoft
The UK government is mulling an antitrust investigation into Microsoft's partnership with OpenAI, raising concerns about potential competition implications following the AI startup's recent leadership turmoil
The UK government is contemplating an antitrust investigation into Microsoft's partnership with OpenAI, citing concerns about potential effects on competition following the resolution of a significant leadership crisis at the AI startup. The Competition and Markets Authority is seeking public input on whether to launch an inquiry to assess whether the extensive partnership between the two companies could be classified as a "relevant merger."
Microsoft has announced that OpenAI will continue to operate as an independent company. "Since 2019, our partnership with OpenAI has promoted greater AI innovation and competition, while maintaining the independence of both companies," stated Brad Smith, Microsoft's vice chairman and president. "The only change is that Microsoft will now have a non-voting observer on OpenAI's Board, which is distinct from an acquisition. We will collaborate closely with the CMA to provide all necessary information."
OpenAI did not respond right away to a comment request. The announcement shows increasing antitrust investigation of Microsoft in the UK. The CMA has investigated Microsoft's practices in cloud services and its merger with video game company Activision Blizzard, which was approved earlier this fall after Microsoft made changes to the deal.
Microsoft has made a substantial investment in OpenAI and is working to incorporate its technology into Microsoft's services. Satya Nadella, CEO of Microsoft, has emphasized the deep integration between the two companies. Following recent events at OpenAI, where CEO Sam Altman was both fired and rehired, it was announced that Microsoft would be gaining a non-voting seat on OpenAI's board. Nadella emphasized the importance of Microsoft's partnership with OpenAI and expressed support for its mission and independence.
The governance of OpenAI has seen recent developments that involved Microsoft, as stated in a blog post by the CMA on Friday. As a result, the CMA is issuing an invitation to comment to determine if the partnership between Microsoft and OpenAI, along with recent developments, has led to a relevant merger situation and the potential impact on competition.
The CMA stated that the proposed investigation would examine whether Microsoft has "de facto control" over OpenAI. The agency's process generally starts with an invitation to comment, followed by a first-phase investigation, and potentially an in-depth phase-two probe if needed.
