UK launches initial review of ties between Microsoft and OpenAI

11 Dec 2023

Image: © Happy Hues/

While the two companies have had a partnership for a while, things got serious when Microsoft committed to investing billions into OpenAI earlier this year.

The relationship between Microsoft and OpenAI is under scrutiny in the UK as its competition watchdog asked the two companies and third parties to comment on whether the deal is effectively a merger-like situation.

Using these comments, the Competition and Markets Authority (CMA) will determine whether Microsoft’s mammoth investment in OpenAI raises any competition concerns in the UK.

The first part of the CMA’s information gathering process, the call for comment is a potential precursor to a formal phase 1 investigation.

“[This] would only happen once the CMA has received the information it needs from the partnership parties,” said Sorcha O’Carroll, senior director for mergers at the watchdog.

OpenAI is at the very forefront of generative AI. Led by CEO Sam Altman, the Silicon Valley start-up kickstarted the current global AI race with the launch of ChatGPT last year.

While Microsoft and OpenAI have had a partnership for a while, things got serious when the software giant committed to investing billions into the AI company that was co-founded by Elon Musk before he left in 2018.

“The partnership between Microsoft and OpenAI represents a close, multi-faceted relationship between two firms with significant activities in [foundation models] and related markets,” reads a statement from the CMA published on Friday (8 December).

The watchdog said that the call for comments comes soon after a “number of developments” have recently occurred in the governance of OpenAI that involve Microsoft. This is a reference to Altman being fired last month, taking up a role at Microsoft and returning to OpenAI as CEO.

The CMA said it will review whether the partnership has resulted in an acquisition of control, wherein one party has “material influence, de facto control or more than 50pc of the voting rights” over another entity – or change in the nature of control by one entity over another.

“The current dominance of Big Tech in the market is something that should concern everyone genuinely motivated to see AI succeed,” said Josh Mesout, chief innovation officer at Civo, a cloud company based in the UK.

“The future has to be a level playing field, where any business – no matter their size – can innovate and deliver cutting-edge solutions using AI and ML.”

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Vish Gain is a journalist with Silicon Republic