Why CMA is investigating Microsoft-Inflection AI dealWhat Microsoft has to sayMicrosoft , in March, acquired Inflection AI and hired its staff to join its new AI division. Now, Britain's competition regulator has started a formal investigation (phase 1) into the tech giant’s partnership with the startup under merger rules.“The Competition and Markets Authority ( CMA ) is considering whether it is or may be the case that Microsoft Corporation’s hiring of certain former employees of Inflection and its entry into associated arrangements with Inflection has resulted in the creation of a relevant merger situation under the merger provisions of the Enterprise Act 2002,” the regulator announced on Tuesday (July 16).The CMA has set September 11 as the deadline to decide whether the investigation will progress into a second phase. If it happens, this may lead to an antitrust battle, presenting a stumbling block for Microsoft’s AI plans.In March, the tech giant hired Mustafa Suleyman , co-founder of Google DeepMind, as head of its newly-created AI unit. Along with Suleyman, Microsoft also hired a number of employees from Inflection as a part of the deal which is reported to have cost the Windows-maker $650 million.The CMA said it will find whether the creation of merger has resulted, or may be expected to result, “in a substantial lessening of competition within any market or markets in the United Kingdom for goods or services.”Previously, the CMA also signalled interest in Microsoft’s Mistral AI partnership but later decided that it didn’t qualify for further probe. Microsoft already faced questions over its partnerships with ChatGPT-maker OpenAI.Responding to the UK Competition and Markets Authority's (CMA) investigation, a Microsoft spokesperson told news agency Reuters: “We are confident that the hiring of talent promotes competition and should not be treated as a merger.”“We will provide the UK Competition and Markets Authority with the information it needs to complete its enquiries expeditiously,” the spokesperson added.The CMA has also sought views on partnerships between Amazon and Anthropic.

Source: The Times July 16, 2024 21:33 UTC