The CMA's investigation could lead to steps being taken to separate the two companies. The regulator is concerned that a few companies are making it difficult for others to compete in the development and operation of AI foundation models. The inquiry will also examine whether the two businesses are distinct enough, how much revenue is generated through their relationship, and whether they account for more than 25% of the market for the product in question.
Key takeaways:
- The Competition and Markets Authority (CMA) in the U.K. has launched an inquiry into the relationship between OpenAI and Microsoft, following recent management changes at OpenAI and a larger role for Microsoft in the company.
- The CMA is investigating whether the two companies are in a “relevant merger situation”, a term used to describe situations where a company is not being bought or merged with another, yet the relationship between the two parties impacts competition for the rest of the market.
- Microsoft has a significant investment in OpenAI and the two companies work closely together in developing AI services, including those incorporating Microsoft’s Azure cloud platform.
- The CMA's investigation could lead to a better understanding of the governance arrangements underpinning the OpenAI project and inform its broader oversight of the fast developing AI sector.