UK Antitrust Investigates Microsoft-OpenAI Partnership

The UK antitrust regulator is considering opening a merger investigation into Microsoft’s multibillion-dollar partnership with OpenAI. In response to this declaration, Microsoft informed the ChatGPT manufacturer that it merely serves as a non-voting observer on the board.

Following the ChatGPT manufacturer’s disclosure that the United States technology behemoth would hold a non-voting board seat, the investigation was officially launched.

In accordance with the Competition and Markets Authority’s (CMA) statement from Friday, December 8, the examination will determine whether the collaboration constitutes an “acquisition of control,” which denotes the significant influence of one party over another.

In addition to accessing confidential information and attending board meetings of OpenAI, the observer position grants Microsoft’s representative the ability to do so without the right to vote on matters such as the election or selection of directors.

“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.”

Microsoft’s decision to assume a non-voting role on OpenAI’s board was announced in November. This action follows that announcement.

It also stated that it was evaluating whether the transaction had led to a pertinent merger situation and that this is the second time this year that the regulator has examined the operations of the U.S. software company.

In contrast to acquisitions such as Google’s purchase of DeepMind in the United Kingdom, Microsoft vice chair and president Brad Smith stated on the X platform (formerly Twitter) that the sole discrepancy in the collaboration between the two organizations is Microsoft’s non-voting observer status on OpenAI’s Board.

Microsoft is forthcoming with a collaborative effort with the CMA, according to Smith. Bloomberg reported in January 2023 that Microsoft had committed to an investment in OpenAI that surpassed $10 billion.

Furthermore, in the United Kingdom, Microsoft intends to implement a $3.2-billion investment in artificial intelligence (AI) training and infrastructure.