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Microsoft's $10 billion partnership with OpenAI faces its first big antitrust hiccup

Jyoti Mann   

Microsoft's $10 billion partnership with OpenAI faces its first big antitrust hiccup
  • The UK's Competition and Markets Authority has Microsoft's tie-up with OpenAI in its crosshairs.
  • The antitrust watchdog said it had been "closely monitoring" the impact of such partnerships.

Microsoft's partnership with OpenAI is facing its first real antitrust challenge, courtesy of the UK's Competition and Markets Authority.

The CMA said Friday that it would weigh up whether the partnership, underpinned by a $10 billion investment in OpenAI, meant Microsoft held any power over the ChatGPT maker.

It said in a press release: "The CMA will review whether the partnership has resulted in an acquisition of control — that is, where it results in one party having material influence, de facto control or more than 50% of the voting rights over another entity — or change in the nature of control by one entity over another."

The watchdog added that it had been "closely monitoring" the impact of such partnerships in AI that could weaken competition and hinder the development or use of foundation models.

The CMA is inviting parties to comment on whether Microsoft's partnership with OpenAI could have an adverse effect on competition.

It will then assess if it's worthy of a probe after external parties comment, a process that occurs before an official investigation is launched. Interested third parties have until January 3 to get in touch with their views, per the partnership merger inquiry page.

The CMA said the tie-up, through Microsoft's investment and provision of its cloud services, "represents a close, multi-faceted relationship between two firms with significant activities in FMs and related markets."

Microsoft's vice chair and president, Brad Smith, told Business Insider in a statement, "Since 2019, we've forged a partnership with OpenAI that has fostered more AI innovation and competition, while preserving independence for both companies."

He added, "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."

It's not the first time the CMA has scrutinized companies that have entered into a partnership. In 2019, the watchdog probed Amazon's 16% investment in delivery firm Deliveroo. A year later, it cleared the tech giant's stake in the company after finding that it would not adversely affect customers.

OpenAI didn't immediately respond to BI's request for comment, made outside of normal working hours.



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