The CMA has opened a phase one investigation into partnership between Microsoft and Inflection AIwith a Sept. 11 deadline to decide whether to proceed with a more in-depth second phase. The investigation focuses on Microsoft’s hiring of much of Inflection AI’s staff months ago and the creation of a new AI division within the company.
If the investigation progresses to Phase 2, it could pose a significant obstacle to Microsoft’s AI ambitions. The CMA launched a major investigation into Microsoft’s acquisition of Activision Blizzard in 2022, forcing the company to restructure the deal and give up significant cloud gaming rights in the UK and other markets.
The investigation into the partnership with Inflection AI is still in its early stages, but the findings could have an impact far beyond the UK. Among the Inflection AI employees hired by Microsoft is Mustafa Suleyman, co-founder of Google DeepMind and Inflection AI itself, who now heads Microsoft’s AI division.
Regulators in the UK and EU are closely monitoring big tech companies’ partnerships and investments in AI. The CMA had previously shown interest in Microsoft’s partnership with Mistral AI, but decided not to launch an investigation because it didn’t fall under its merger rules. The FTC and DOJ are also doing the same, with investigations into Microsoft, NVIDIA, and OpenAI for dominance.
Microsoft has also recently been accused of violating antitrust rules in the EU for including the Teams app in Office 365 and Microsoft 365 subscriptions. If found guilty, the company could be fined up to 10% of its annual global revenue. Additionally, Microsoft recently reached a settlement with a group of cloud companies in Europe to avoid a potential antitrust battle.
What do you think about this CMA investigation? Do you think Microsoft is abusing its dominant position in the AI market? Share your thoughts in the comments!
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