Competition and Markets Authority (CMA), the United Kingdom’s Antitrust authority, is contemplating opening a merger investigation into the multibillion-dollar partnership between Microsoft and OpenAI.
In response to this declaration, Microsoft stated that it serves solely as a non-voting observer on the board of the ChatGPT manufacturer.
The investigation declaration follows the ChatGPT developer’s disclosure that the American technology behemoth would serve on the board in a non-voting capacity.
According to the Competition and Markets Authority (CMA), as of Friday, December 8, the examination will determine whether the collaboration comprises an “acquisition of control,” which signifies the significant influence of one party over another.
In addition to accessing confidential information and attending board meetings of OpenAI, the observer status grants Microsoft’s representative the ability to do so without the ability to vote on matters such as the election or selection of 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.”
Following its November announcement that it would assume a non-voting role on OpenAI’s board, Microsoft has now taken this action. The regulator has examined the operations of the U.S. software company twice this year. Additionally, it stated that it was contemplating whether the transaction had led to a pertinent merger scenario.
Brad Smith, vice chair and president of Microsoft, stated on the X platform (formerly known as Twitter) that the sole difference in the collaboration between the two organizations is that Microsoft maintains a non-voting observer position on OpenAI’s Board.
This contrasts with acquisitions such as Google’s acquisition of DeepMind in the United Kingdom. According to Smith, Microsoft is eager to collaborate closely with the CMA.
A Bloomberg report from January 2023 states that Microsoft had committed to an investment in OpenAI that surpassed $10 billion. Additionally, Microsoft is prepared to announce a $3.2 billion investment in the United Kingdom’s artificial intelligence (AI) infrastructure and training.
