The UK competition regulator determines that Microsoft's partnership with OpenAI does not require investigation.

The UK competition authority, the Competition and Markets Authority (CMA), announced that the collaboration between Microsoft and OpenAI will not be subject to an investigation under the merger provisions of the Companies Act 2002, which regulates anti-competitive practices in the country. In its decision, the CMA indicated that, after evaluating all the available evidence, it does not consider Microsoft to currently control OpenAI's business policy, although it does exert significant influence over it. This means that there is no change of control that would create a relevant merger situation.

The CMA had initiated an investigation into this partnership in December 2023. Microsoft, one of OpenAI's main investors, has invested nearly $14 billion since 2019 and has integrated several of its technologies into a managed service known as the Azure OpenAI Service. Additionally, it closely collaborates with OpenAI in the development of products such as the Copilot chatbot and the GitHub Copilot programming assistant.

Initially, the CMA was concerned about the potential control Microsoft had gained over OpenAI's business policy since 2019, a concern that intensified with Microsoft's role in the reappointment of OpenAI CEO Sam Altman in November 2023. The CMA feared that this control could significantly reduce competition in the AI industry in the UK, especially if Microsoft limited competitors' access to OpenAI's leading models in crucial markets.

However, in its recent decision, the CMA highlighted that recent developments might have weakened, rather than strengthened, Microsoft’s influence over OpenAI. In January, Microsoft announced that it had renegotiated parts of its cloud computing agreement with OpenAI, establishing a model where it has a "right of first refusal" for certain OpenAI projects. It has also enabled OpenAI to build greater computational capacity, including a $500 billion data center contract with investor SoftBank. Previously, Microsoft was the exclusive cloud provider for OpenAI and, last year, it refrained from taking a seat on OpenAI's board, which could have attracted greater regulatory scrutiny.

The CMA has noted that important aspects of the partnership have changed during the course of the investigation and that there is no clear line between those factors that could lead to material influence and those that could lead to de facto control. The CMA has intensified its investigations into the investments of major tech companies in AI and AI startups to prevent the concentration of power in this emerging sector. However, so far it has found no evidence of irregularities, as evidenced by its approval of Alphabet, Google's parent company, in its relationships with Anthropic, a rival of OpenAI.