UK regulator clears Microsoft’s $13bn deal with OpenAI after lengthy delay

LovabledanielsMarch 6, 202575 Views

UK CMA was worried about Microsoft’s involvement in OpenAI
“OpenAI does not qualify for investigation,” says Authority
Critics worried about government pressure on CMA

The UK’s Competition and Markets Authority (CMA) has ended its investigation into Microsoft’s partnership with OpenAI and its multibillion-dollar investment into the company behind ChatGPT.

Despite Microsoft investing heavily in the AI startup and having exclusive use of some of its AI products, the CMA has now concluded the partnership has not been problematic.

The watchdog also considered how the companies’ relationship changed during the short period that CEO Sam Altman was fired, then rehired.

UK CMA deems Microsoft-OpenAI partnership healthy

The CMA said yesterday: “The CMA has decided that Microsoft’s partnership with OpenAI does not qualify for investigation under the merger provisions of the Enterprise Act 2002.”

Expanding on its conclusion in a phase one summary, the CMA noted that “no relevant merger situation ha[d] been created,” therefore it did “not ha[ve] to conclude on whether the other criteria for establishing a relevant merger situation [were] met.”

The Authority initiated the probe back in December 2023 because of Microsoft’s involvement in bringing Sam Altman back to OpenAI, but despite Microsoft’s “high level of material influence” over OpenAI, it doesn’t have full control over the company.

The official decision came just one day after the merger inquiry was launched, and critics have argued that political changes and government pressure on regulators to focus on economic growth may have guided the CMA’s conclusion.

Foxglove co-executive director Rosa Curling told the BBC: “This is a bad sign that Big Tech has successfully convinced the prime minister to defang our competition regulator and let Big Tech gobble up the current generation of cutting-edge tech – just like they did the last one.”

Microsoft welcomed the outcome: “Our OpenAI partnership and its continued evolution promote competition, innovation, and responsible AI development, and we welcome the CMA’s conclusion, after careful and prudent consideration of the commercial realities, to close its investigation.”