Microsoft’s connection with the OpenAI startup has become the subject of British competition regulators

UK authorities, more precisely the Competition and Markets Authority (CMA) are considering an investigation to determine whether Microsoft's connection with the OpenAI startup resulted in the acquisition of market control, which is subject to antitrust laws. The CMA said it was looking into the partnership between the two companies, including “recent developments,” possibly alluding to the drama surrounding the ousting and reinstatement of Sam Altman as CEO of OpenAI, in which Microsoft played a large role.

„The CMA is now issuing an ITC (The Invitation to Comment) to determine whether the partnership between Microsoft and OpenAI, including recent events, has resulted in a relevant merger situation and, if so, the potential impact on competition“, it is written in the announcement of the Administration.

The ITC is the document that represents the first part of the information gathering process within the CMA and it comes before any formal phase one investigation is initiated. The administration says it will review whether Microsoft's relationship with OpenAI resulted in a takeover — where one party has material influence, de facto control or more than 50 percent of the voting power over another entity.

Regulators noted that there is a “close and multi-layered” partnership between the two companies, including Microsoft's billion-dollar investment, cooperation in the development of technology and cloud services. The CMA also states that both firms have significant activities in financial and related markets, which means that their business relationships directly affect investors.

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When Sam Altman was fired by OpenAI's board of directors, Microsoft jumped into the story by hiring him, and then most OpenAI employees threatened to defect to Microsoft if Altman didn't return. The OpenAI board soon changed its mind, and Altman returned to his former position.

The partnership with the OpenAI company maintains the independence of both companies, Microsoft claims in a statement to the Engadget portal.

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„Since 2019, we have established a partnership with the company OpenAI, which has encouraged more innovation and competition in the field of artificial intelligence, preserving the independence of both companies“, says Microsoft head Brend Smith in a statement.

The only thing that has changed is that Microsoft will now have a seat on the startup's board of directors, but in a non-voting observer role, which it claims is very different from a takeover of the company, as was the case with Google's purchase of DeepMind in Great Britain. Britain. He adds that company representatives will closely cooperate with the Administration investigating this case, providing it with all the necessary information.

If the CMA decides it has material to launch an investigation, it would be the second investigation into which Microsoft has been involved in the last year, after the long saga of the purchase of Activision Blizzard. The UK investigation had material effects on that purchase, as Microsoft agreed to sell streaming rights to Activision Blizzard games to Ubisoft to satisfy the CMA's demands.