The Competitive Markets Agency (CMA), the UK’s competition regulator, said on Wednesday that Microsoft’s partnership with Openai was not subject to investigations based on the 2002 UK Enterprise Act merger clause, the country’s anti-competitive practices law.
“Overall, given all the evidence available (…) the CMA does not believe that Microsoft is currently in control of Openai’s commercial policy. “In other words, there are no changes in control that will cause the associated merger situation.”
The CMA began investigating Microsoft’s partnership with Openai in December 2023. The technology giant is one of the top investors in AI companies, with nearly $14 billion since 2019. Microsoft also packages many of the technologies in managed offerings called Azure Openai services and works closely together to develop products like Copilot Chatbot aidub Copilot Assibse.
The CMA was initially concerned that Microsoft gained control of Openai’s commercial policy in 2019 and that it increased following Microsoft’s role in securing the reappointment of Openai CEO Sam Altman in November 2023.
“(a)n Microsoft’s increased control over Openai could raise potential competitive concerns if Microsoft could limit access to Openai’s key models in a market where access to (AI) is important and Microsoft already holds a strong market position.” “The CMA was also concerned that the partnership could potentially impact competition in emerging markets for the supply of accelerated calculations, given Openai’s potential to act as a key customer in this market.”
However, as the CMA noted in its decision on Wednesday, recent developments may have undermined the impact of Microsoft’s influence on Openai.
In January, Microsoft said there was a renegotiation element in its cloud computing agreement with Openai, moving it to a model in which the tech giant has “primary right to reject” for certain Openai workloads. Microsoft also grants an exemption that allows Openai to build additional computing power, including $500 billion data center transactions with investor SoftBank. Previously, Microsoft was Openai’s exclusive cloud provider.
Last year, Microsoft removed plans to win Openai’s board of directors.
“The key aspects of (Microsoft) partnerships are changing over the course of our investigation,” the CMA wrote in its decision. “In addition, there is no “bright line” between factors that can cause material influence and factors that generate de facto control. ”
The CMA has actively investigated the tech industry’s investments in AI and AI startups to prevent the integration of power in the early sectors. However, the agency previously characterized large-scale technology partnerships with AI startups as “interconnected webs,” but found no evidence of fraud. In November, CMA cleared a deal with Openai rival Humanity of Google’s parent company Alphabet.