UK regulator to review Microsoft, OpenAI partnership: Here’s why

Britain’s antitrust regulator has said that it will review Microsoft’s partnership with OpenAI, the company in which it has invested billions of dollars. According to the Competition and Markets Authority (CMA), it will check whether there is a ‘merger situation’ in the partnership.
The CMA will review whether Microsoft’s partnership with OpenAI has resulted in an “acquisition of control,” which leads to one party having material influence over another, news agency Reuters reported.
“There have recently been a number of developments in the governance of OpenAI, some of which involved Microsoft,” the CMA was quoted as saying.
Turmoil at OpenAI
Last month, OpanAI CEO Sam Altman was fired by the company board. Days after this announcement, Microsoft offered him a role at the company and floated an invitation asking all those who were looking to jump ships after Altman’s ouster to join Microsoft under Altman’s leadership in a new AI research team.
“We remain committed to our partnership with OpenAI and have confidence in our product roadmap, our ability to continue to innovate with everything we announced at Microsoft Ignite, and in continuing to support our customers and partners,” Microsoft CEO Satya Nadella said ina post on X.
“And we’re extremely excited to share the news that Sam Altman and Greg Brockman, together with colleagues, will be joining Microsoft to lead a new advanced AI research team. We look forward to moving quickly to provide them with the resources needed for their success,” he added.

However, Altman returned to the company in the same role and later announced that Microsoft will have a non-voting position on the new OpenAI board. This means that Microsoft will be an observer and will have access to confidential information but no voting rights.
Microsoft’s investment in OpenAI
Microsoft has committed to invest over $10 billion into OpenAI and owns 49% of the company. The CMA also said it was also considering if the deal had resulted in the creation of a relevant merger situation.
“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 regulator added.