Microsoft has been both a major financial and technical partner with OpenAI for years and has used its ChatGPT and DALL-E generative AI models in its own Copilot services, among others. Now that tight relationship is getting some attention from the UK Competition and Markets Authority regulatory body.
In a press release, the CMA stated it is “providing an early opportunity for the parties and interested third parties” to send comments to the regulator if the partnership between Microsoft and OpenAI “has resulted in a relevant merger situation”,
The CMA seems to have become interested in looking at this partnership after November’s chaotic situation when OpenAI’s board of directors fired its CEO Sam Altman. The rest of the company staged an open revolt against the board’s decision, and after a few rough days, that board was removed and Altman returned as CEO. Microsoft is now also a non-voting member of OpenAI’s new board of directors.
In today’s announcement, the CMA stated:
In light of these developments, the CMA is now issuing an ITC to determine whether the Microsoft / OpenAI partnership, including recent developments, has resulted in a relevant merger situation and, if so, the potential impact on competition.
The regulator says it will investigate if it is possible Microsoft now has “material influence, de facto control or more than 50% of the voting rights” at OpenAI. If it feels that has happened, it may also see if such a move could have a competitive impact in the UK.
Microsoft President Brad Smith has commented on this move by the CMA in a post on X (formerly Twitter). He also took a bit of a shot against Microsoft’s big AI rival Google:
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.
The CMA stated this is just the first phase of this look into Microsoft and OpenAI and that it “comes in advance of any launch of a formal phase 1 investigation.” There’s no word on when or if that might happen.