Breaking News: Microsoft Under Regulatory Probe in the U.K. After Hiring Inflection AI Team
In a shocking turn of events, Microsoft is now facing a full regulatory probe in the U.K. after hiring the core team behind Inflection AI, a U.S.-based OpenAI rival that Microsoft had previously invested in. The Competition and Markets Authority (CMA) has announced the launch of a "phase 1" merger inquiry, sparking a 40-working day investigative period to gather evidence and determine if a full probe is necessary.
Just four months ago, Microsoft CEO Satya Nadella unveiled a new consumer AI division led by the founders of Inflection AI, including renowned deep learning scientist Karén Simonyan and Google DeepMind co-founder Mustafa Suleyman. This move raised concerns about big tech companies adopting a new M&A approach to bypass regulatory scrutiny around AI, leading to what some are calling a "quasi-merger" strategy.
The CMA's announcement follows preliminary enquiries into multiple AI partnerships, including Microsoft's investment in Mistral AI, a French startup specializing in AI foundation models. While the CMA determined that Microsoft's stake in Mistral AI did not warrant investigation under current merger regulations, the agency is also scrutinizing Amazon's investment in Anthropic and is expected to conduct a full probe into Microsoft's partnership with ChatGPT-maker OpenAI.
With the phase 1 inquiry now underway, the CMA has until September 11 to decide if Microsoft's hiring of the Inflection AI team constitutes a "merger" and if it poses a threat to competition in the U.K. If deemed detrimental, the case will proceed to a more detailed "phase 2" probe lasting around six months.
In conclusion, this regulatory probe could have significant implications for Microsoft's operations in the U.K. and may influence the future of AI partnerships in the tech industry. Stay tuned for updates on this developing story.