The UK watchdog has refused to open a formal investigation into Microsoft’s relationship with OpenAI, deciding that although the company is a ‘material influencer,’ it is not a ‘material controller’ of the AI firm. The Competition and Markets Authority (CMA) said that Microsoft’s $13 billion investment in OpenAI makes it a significant player but does not amount to de facto control, which is not sufficient to warrant an official investigation. The decision comes as policymakers are facing criticism over a perceived negative impact on business confidence in the wake of government pressure to pursue pro-growth policies. Joel Bamford, CMA’s executive for mergers, explained that the decision is not a ‘clean bill of health’ for Microsoft and OpenAI in terms of competition concerns. OpenAI’s decreased reliance on Microsoft’s computing resources was a factor in the decision. Microsoft, which made its investment in OpenAI’s for-profit corporation, welcomed the CMA’s conclusion, and repeated its support for competition, innovation and ‘responsible’ AI development. Microsoft also helped fund OpenAI’s recent $6.6 billion funding round that valued the firm at $157 billion. This is after the CMA refused to investigate Amazon’s investment in Anthropic and Microsoft’s relationships with Mistral and Inflection, although it is monitoring big tech. Search is being investigated by Google, and both Apple and Google’s mobile platforms are subject to separate investigations. Microsoft has also locked horns with the CMA over its cloud computing market investigation, challenging the watchdog for ‘fundamentally misunderstanding’ competition barriers to Google and Amazon. For the moment, the Microsoft-OpenAI partnership is not under scrutiny, but it is a significant discussion in the AI and competition domain.
Microsoft-OpenAI Partnership
