This is the first step in an investigation that is likely to begin next year on one of the technology industry’s most lucrative and newsworthy partnerships.
Writing on its website, the watchdog said: “The CMA has decided to investigate and is inviting comments.”
Both companies, as well as competitors and customers, have been invited to comment on whether “the partnership between Microsoft and OpenAI, including recent developments, has resulted in a relevant merger situation”.
Microsoft has invested billions of dollars in OpenAI since the release of ChatGPT in November 2022. The popularity of the generative artificial intelligence (GenAI) chatbot has remained high since its release one year ago.
Four days after its launch on 30 November 2022, the site set the record for the fastest sign-up of one million users. The chatbot now boasts more than 100 million weekly users.
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The Invitation to Comment (ITC) marks the commencement of the CMA’s information-gathering process, occurring before any formal initiation of a phase 1 investigation.
In a recent report, the CMA underscored both opportunities and risks in the swiftly evolving market for foundation models, outlining proposed principles aimed at steering the market towards positive outcomes for both consumers and businesses.
Among these principles, the need for sustained competition between AI developers takes precedence, fostering innovation, growth and responsible practices in the sector.
Competition partner at UK law firm Fladgate, Alex Haffner, said the inquiry was of particular interest in the wider context of AI regulation.
“In order to move forward with any investigation, the CMA will need to find evidence that the recent fallout from the Sam Altman affair has led to material changes in the governance of OpenAI and, more specifically, Microsoft’s influence over its affairs,” Haffner told Verdict.
He added: “Nonetheless, even if it does not pursue matters further, by opening a preliminary investigation the CMA will be able to better understand the scope of the governance arrangements which underpin the Open AI project and therefore better inform its broader oversight of the fast-developing AI sector.”
As part of its ongoing scrutiny, the CMA has been monitoring partnerships and strategic agreements that could potentially undermine competition in the development or use of foundation models.