The Competition and Markets Authority (CMA) of the United Kingdom has concluded its investigation into the partnership between Microsoft and OpenAI. Initiated in December 2023, the probe examined whether Microsoft’s relationship with OpenAI shifted following a tumultuous period marked by the firing and subsequent rehiring of OpenAI’s CEO, Sam Altman. With significant investments from Microsoft, which includes exclusive access to certain AI products from OpenAI, the CMA scrutinized the extent of Microsoft’s influence over the AI company.
The CMA's findings revealed that although Microsoft "exerts a high level of material influence" over OpenAI's commercial operations, it does not fully control the organization. Therefore, the partnership falls outside the scope of review under the UK’s merger regulations. The investigation followed concerns about Microsoft's role in pressuring OpenAI to reinstate Sam Altman after his dismissal.
"In view of Microsoft's potentially important role in securing Sam Altman's re-appointment, the CMA believed there was a reasonable chance that an investigation would reveal that Microsoft had increased its control over OpenAI's commercial policy," – CMA
The UK government played a significant role in shaping the CMA's approach. In January, the government removed Marcus Bokkerink, then-chair of the CMA, citing dissatisfaction with his response to a governmental call. In February, it issued new directives to the CMA, emphasizing "pro-growth and pro-investment interventions." This shift in political climate has raised concerns among digital rights activists.
Foxglove, a digital rights advocacy group, criticized the outcome of the investigation. Rosa Curling, co-executive director of Foxglove, pointed out that the CMA's decision reflects changes in the political environment within which it operates.
"We have sat on this decision for over a year, yet within just a few weeks of a former Amazon boss being installed as chair, it has decided everything was absolutely fine all along, nothing to see here," – Rosa Curling
The handling of AI partnerships is an ongoing issue for regulators worldwide. The UK's reluctance to sign an AI agreement at a summit in Paris, aligning with the US stance, underscores the complexity of international cooperation in regulating AI technologies.
Joel Bamford, CMA Executive Director for Mergers, acknowledged the lengthy process of the investigation but emphasized its importance for business confidence and investment.
"We are not blind to the length of time that this investigation has taken… We know pace matters to business confidence and investment." – Joel Bamford
Despite concluding the investigation, the CMA cautioned that this should not be interpreted as an endorsement of the partnership's impact on competition. Chloe Birkett of the CMA highlighted that while a less interventionist approach might be adopted, not all deals would be approved without scrutiny.
"The CMA's purpose is to help preserve competition in markets to ensure that consumers get a fair deal," – Chloe Birkett