The UK’s Competition and Markets Authority (CMA) has decided against a formal investigation into Microsoft’s partnership with OpenAI, the company behind the popular artificial intelligence chatbot ChatGPT.
The CMA stated that while Microsoft holds “material influence” over OpenAI, its $13 billion investment does not give it de facto control, thus not meeting the threshold for an official inquiry under Britain’s merger control regime. This decision comes after Microsoft recently contributed to a funding round that raised $6.6 billion for OpenAI, valuing the business at $157 billion.
However, the CMA’s executive director for mergers, Joel Bamford, clarified that the decision “should not be read as the partnership being given a clean bill of health on competition concerns.” The watchdog acknowledged Microsoft’s influence, noting a recent reduction in OpenAI’s reliance on Microsoft for computer power.
The CMA launched its review following the dramatic events of November 2023, when Sam Altman was briefly fired and then reinstated as OpenAI’s chief executive. During this period, Microsoft initially announced Altman’s hiring, only for him to return to OpenAI shortly after.
A Microsoft spokesperson welcomed the CMA’s conclusion, stating that the ongoing partnership with OpenAI “promote competition, innovation, and responsible AI development.” The CMA had previously decided not to investigate Amazon’s investment in Anthropic, as well as other Microsoft partnerships with the AI firms Mistral and Inflection.
OpenAI operates with a non-profit board and a for-profit subsidiary in which Microsoft is the largest backer. Returns to investors and employees are capped.
Despite this decision, the CMA has been actively investigating other major tech firms. In January, the CMA launched investigations into Google concerning its dominance in internet search and advertising, as well as separate inquiries into the impact of Apple and Google’s mobile platforms on consumers and businesses. Microsoft itself faced scrutiny in January when the CMA expressed concern over the cloud market. At the time, Microsoft argued the CMA was making a “fundamental mistake” in its investigation into the cloud market, where the watchdog said the tech firm was making it harder for Google and Amazon to compete effectively.
