| The CMA is investigating the link between Microsoft and OpenAI. (Source: Getty Images) |
According to an announcement on December 8th, the CMA is seeking input from both US companies, as well as relevant third parties. The CMA stated that the purpose of the investigation is to determine whether the partnership, “including recent developments,” between Microsoft and OpenAI “leads to a merger between the two parties and, if so, how the merger might affect competition in the UK.”
The investigation is being conducted in the context of Microsoft announcing late last month that a representative of the software giant had been appointed to OpenAI's new board of directors as an observer.
A few days earlier, OpenAI's internal affairs had descended into chaos after the company's board of directors fired CEO Sam Altman and then rehired him following protests from employees and investors.
According to the CMA, criteria for meeting the “relevant merger situation” may include “minority acquisitions or, in some cases, commercial agreements such as software outsourcing agreements.” The CMA argues that the rapid development of artificial intelligence (AI) technology presents both opportunities and risks to the competitiveness of businesses, as well as the responsibility to protect consumers. At the same time, the agency emphasizes “the need for sustainable competition” among companies involved in AI development.
In response to these developments, Microsoft President Brad Smith stated in a press release: “Since 2019, we have built a partnership with OpenAI to drive more innovation and competition in AI, while maintaining the independence of both companies.”
The only thing that has changed is that Microsoft will now have a non-voting supervisor on OpenAI's board of directors. This is very different from an acquisition, like Google's purchase of DeepMind in the UK. We will work closely with the CMA to provide them with all the information they need.”
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