The United Kingdom’s antitrust regulator is considering initiating a merger investigation into Microsoft’s multibillion-dollar collaboration with OpenAI.
This announcement resulted in a response from Microsoft, declaring that it only plays a non-voting observer role on the board of the ChatGPT maker.
The investigation announcement follows the ChatGPT maker’s disclosure that the United States tech giant would hold a non-voting board seat. The examination will assess whether the collaboration constitutes an “acquisition of control,” implying the substantial influence of one party over another, as stated by the Competition and Markets Authority (CMA) on Friday, Dec. 8.
The observer position means Microsoft’s representative can attend OpenAI’s board meetings and access confidential information, but it does not have voting rights on matters, including electing or choosing directors.
“In light of these developments, the CMA is now issuing an ITC to determine whether the Microsoft/OpenAI partnership, including recent developments, has resulted in a relevant merger situation and, if so, the potential impact on competition.”
The move comes after a November announcement that Microsoft will take a non-voting position on OpenAI’s board. It is the second time the regulator has looked at the U.S. software company’s operations this year, and it also said it was considering if the deal had resulted in a relevant merger situation.
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Microsoft vice chair and president Brad Smith emphasized on the X platform (formerly Twitter) that the only modification in the collaboration between the two companies is Microsoft having a non-voting observer on OpenAI’s Board — distinct from acquisitions like Google’s purchase of DeepMind in the United Kingdom. Smith stated that Microsoft is willing to work closely with the CMA.
According to a Bloomberg report, Microsoft pledged an investment exceeding $10 billion in OpenAI in January 2023. Microsoft is also set to launch a $3.2-billion investment in artificial intelligence (AI) infrastructure and training in the United Kingdom.
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Source: https://cointelegraph.com/news/microsoft-faces-uk-antitrust-probe-over-openai-deal-structure