Competition watchdog asks for views on Microsoft’s partnership with OpenAI

The UK’s competition watchdog has asked for interested parties to comment on Microsoft’s partnership with OpenAI and whether it could impact the AI market.

The Competition and Markets Authority (CMA) wants to review whether the partnership has resulted in an acquisition of control, whether a de facto merger has taken place and if this could impact on competition.

Microsoft is OpenAI’s largest investor and has invested billions of dollars into the artificial intelligence firm, which is the creator of ChatGPT.

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

The CMA said the recent saga involving OpenAI chief executive Sam Altman, who was briefly removed as the company boss before returning following changes to the board – via being approached to join a new internal Microsoft AI research team – had partly influenced its decision, as it said Microsoft had been involved in those governance developments.

It said the partnership between the two firms, which involves multi-year, multi-billion dollar investment and collaboration in technology development, represented a close, multi-faceted relationship between companies with significant activities in AI foundation models – an area the CMA is monitoring closely for potential competition or consumer protection issues.

The competition watchdog said it would review any comments it received from interested parties and could launch an investigation into the partnership as a result if it felt it was necessary.

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

Microsoft president Brad Smith said: “Since 2019, we’ve forged a partnership with OpenAI that has fostered more AI innovation and competition while preserving independence for both companies.

“The only thing that has changed is that Microsoft will now have a non-voting observer on OpenAI’s board, which is very different from an acquisition such as Google’s purchase of DeepMind in the UK.

“We will work closely with the CMA to provide all the information it needs.”