UK regulators are halting their review of the partnership between Microsoft (MS) and ChatGPT developer OpenAI. On the 5th (local time), the CMA announced that the 2023 agreement between the two companies is not subject to investigation under merger regulations.
This decision comes after approximately 14 months of scrutiny.
MS has partnered with OpenAI and invested $13 billion since 2019. Accordingly, the CMA has been investigating since late 2023 whether MS’s partnership grants it excessive control over OpenAI, thereby hindering market competition.
However, the CMA stated that although MS has gained substantial influence over OpenAI, it does not exercise effective control, thus failing to meet the criteria for a formal investigation. The CMA also noted that OpenAI’s dependence on MS for computing power, a core element in AI business operations, has decreased.
Joel Bamford, CMA’s mergers director, said in a LinkedIn post, "We are aware that this investigation has taken an unusually long time," adding, "The complex nature of the partnership, changing conditions, and ongoing discussions with the companies contributed to the extended review period."
MS stated, "Our collaboration and continuous development with OpenAI will promote market competition."
OpenAI said in a statement, "We are focused on developing safe and beneficial AI for everyone."
While MS is under investigation for cloud services in the UK and elsewhere, this decision has removed some uncertainty. The US Federal Trade Commission (FTC) is also monitoring the agreement between the two companies, concerned that MS might extend its dominance in the cloud computing market into the AI sector.
Meanwhile, this decision came just over a month after Donald Trump was inaugurated as US president. Facing European regulations, US big tech companies have aligned themselves with Trump, including making significant contributions to his inauguration. Last month, during a virtual speech at the World Economic Forum (WEF) in Davos, Switzerland, Trump criticized European Union (EU) fines imposed on US big tech as "a kind of tax," expressing his disapproval of European regulations.
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