UK Regulator Eyes Microsoft-OpenAI Partnership for Potential Investigation
Summary:
The UK's Competition and Markets Authority (CMA) is contemplating an investigation into the partnership between Microsoft and OpenAI, following the disclosure that Microsoft will hold a non-voting seat on OpenAI’s board. The move marks the second time this year that the CMA has scrutinised Microsoft's operations. Meanwhile, Microsoft's Vice Chairman and President, Brad Smith, insists that this partnership differs from acquisitions like Google's purchase of DeepMind in the UK. The issue at hand is the potential for such a partnership to result in a 'relevant merger situation'.
The Competition and Markets Authority (CMA) of the UK is contemplating initiating an enquiry into the multi-billion dollar partnership between Microsoft and OpenAI. Microsoft has responded to the news, expressing that it merely holds a non-voting observer role on the board of the makers of ChatGPT. This decision follows on the heels of the revelation by ChatGPT's maker that a board seat was granted to the American tech powerhouse but with no voting rights. The investigation's intent is to determine whether this partnership equates to "acquisition of control", where one party predominantly influences the other. The observer role taken by Microsoft allows its representative to attend OpenAI’s board meetings and review confidential documents, though without any voting powers, including the appointment or selection of directors. The CMA issued an invitation to comment (ITC) to ascertain whether the partnership between Microsoft and OpenAI creates a viable merger situation and its potential implications for competition. This decision was taken following the November news of Microsoft acquiring a non-voting role on OpenAI's board. It is the second time the regulator has scrutinised the American software firm's operations this year and is also contemplating if the deal potentially creates a merger situation. Meanwhile Advisors, an entity associated with Sam Altman, is launching a BTC private credit fund. Microsoft Vice Chair and President, Brad Smith, clarified on the X platform (previously known as Twitter) that the only change in the partnership is Microsoft's non-voting observer role within OpenAI's board. This differs from acquisitions like Google's purchase of DeepMind in the UK. He further added that Microsoft is ready to cooperate closely with the CMA. A Bloomberg report revealed that Microsoft pledged an investment of over $10 billion in OpenAI in January 2023. Additionally, Microsoft is prepared to make a $3.2 billion investment in the UK for the development of AI infrastructure and training. For real-time market alerts powered by AI, check out the Markets Pro magazine.
Published At
12/8/2023 4:54:45 PM
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