UK Antitrust Regulator Eyes Microsoft-OpenAI Partnership

The United Kingdom’s Competition and Markets Authority (CMA) is gathering information on the partnership between Microsoft and OpenAI. 

The regulator aims to determine if “recent developments” have resulted in a merger situation and if a merger could impact competition in the U.K., the CMA said in a Friday (Dec. 8) press release. 

The CMA has issued an Invitation to Comment (ITC) that provides an opportunity for Microsoft, OpenAI and interested third parties to comment on these issues before the regulator determines whether to launch a formal phase 1 investigation, according to the release. 

“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,” Sorcha O’Carroll, senior director for mergers at the CMA, said in the release. 

This move comes at a time when changes in the governance of OpenAI — some of which involve Microsoft — have led the CMA to review whether the Microsoft-OpenAI partnership has resulted in an acquisition of control by one entity over another, the release said. 

The invitation to comment also comes as the CMA has been monitoring the impact of partnerships and strategic agreements throughout the artificial intelligence (AI) industry, seeing if these arrangements could weaken competition in the development or use of foundation models (FMs), per the release. 

With the speed at which AI is scaling, this is a pivotal moment in the development of the technology, the release said. It’s also a moment in which sustained competition between developers is critical for the development and distribution of the technology. 

“The partnership between Microsoft and OpenAI (including a multi-year, multi-billion-dollar investment, collaboration in technology development and exclusive provision of cloud services by Microsoft to OpenAI) represents a close, multi-faceted relationship between two firms with significant activities in FMs and related markets,” the press release said. 

OpenAI announced on Nov. 29 that Microsoft has a seat on its new board, but no voting rights. 

OpenAI’s board had been in flux following the ouster and rehiring of CEO Sam Altman in November. 

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