UK Competition Watchdog Clears Microsoft's $13 Billion OpenAI Partnership

UK regulator clears Microsoft's $13bn deal with OpenAI after lengthy delay

The UK's Competition and Markets Authority (CMA) has ended its investigation into Microsoft's partnership with OpenAI and its multibillion-dollar investment into the company behind ChatGPT. Despite Microsoft investing heavily in the AI startup and having exclusive use of some of its AI products, the CMA has now concluded the partnership has not been problematic. The watchdog also considered how the companies' relationship changed during the short period that CEO Sam Altman was fired, then rehired. The CMA said yesterday: "The CMA has decided that Microsoft's partnership with OpenAI does not qualify for investigation under the merger provisions of the Enterprise Act 2002." Expanding on its conclusion in a phase one summary, the CMA noted that "no relevant merger situation ha[d] been created," therefore it did "not ha[ve] to conclude on whether the other criteria for establishing a relevant merger situation [were] met." The Authority initiated the probe back in December 2023 because of Microsoft's involvement in bringing Sam Altman back to OpenAI, but despite Microsoft's "high level of material influence" over OpenAI, it doesn't have full control over the company. The official decision came just one day after the merger inquiry was launched, and critics have argued that political changes and government pressure on regulators to focus on economic growth may have guided the CMA's conclusion. Foxglove co-executive director Rosa Curling told the BBC: "This is a bad sign that Big Tech has successfully convinced the prime minister to defang our competition regulator and let Big Tech gobble up the current generation of cutting-edge tech - just like they did the last one." Microsoft welcomed the outcome: "Our OpenAI partnership and its continued evolution promote competition, innovation, and responsible AI development, and we welcome the CMA's conclusion, after careful and prudent consideration of the commercial realities, to close its investigation."

Microsoft's $13bn OpenAI tie-up cleared by UK competition regulator

Microsoft's $13bn investment in OpenAI has been cleared by the UK's competition regulator, weeks after the artificial intelligence start-up struck a new partnership with SoftBank that reduces its reliance on the US big tech company for its computing infrastructure. The Competition and Markets Authority on Wednesday said the deal did not qualify for a more formal investigation into whether the partnership was a merger between the two companies. It determined that there had not been any "change of control" that gave Microsoft "de facto control over OpenAI". The regulator added that "recent developments in the partnership which reduce OpenAI's reliance on Microsoft for compute" -- an apparent reference to OpenAI and SoftBank's new $100bn AI infrastructure project Stargate -- "particularly" contributed to its decision. However, Joel Bamford, the CMA's executive director for mergers, said the decision "should not be read as the partnership being given a clean bill of health on potential competition concerns". The CMA's decision noted that Microsoft still exerted a "high level of material influence" over OpenAI's commercial policy. The announcement comes as the CMA has faced intense scrutiny in recent months from the government to show it is promoting growth and not stifling innovation in the UK. Ministers abruptly ousted the agency's chair Marcus Bokkerink last month, replacing him with the former head of Amazon UK, Doug Gurr. The CMA announced in December 2023 that it was gathering information about whether to launch a formal investigation into the Microsoft deal, and was followed by a similar probe by the EU. Last June, the EU cleared the tie-up under its merger control rules. However, Margrethe Vestager, the bloc's then competition chief, warned at the time that the "story is not over" as the EU examined other aspects of the two companies' relationships, in what was seen as a potential prelude to an antitrust probe. In a market study from January 2025, the Federal Trade Commission said deals such as Microsoft's and OpenAI's raised antitrust concerns. "[P]artnerships by big tech firms can create lock-in, deprive start-ups of key AI inputs, and reveal sensitive information that can undermine fair competition," former FTC chair Lina Khan said then. Microsoft is the largest investor in OpenAI, having backed the company with more than $13bn. The original deal granted Microsoft an exclusive licence to OpenAI's AI research in return for Microsoft offering OpenAI the supercomputing resources it needs to build powerful AI models. But the companies' relationship has become more strained over the past 18 months, with both reducing their reliance on each other for AI systems and the costly infrastructure that powers them. The CMA was the first regulator to look into Microsoft's ties to OpenAI after the start-up's board ousted chief executive Sam Altman in November 2023 only to rehire him a few days later. Microsoft, which had pushed for Altman's return to the helm of the company, ended up taking a non-voting observer seat on OpenAI's board following the incident. The CMA said it was initially concerned the partnership could give Microsoft control over OpenAI's business. Following regulator scrutiny, Microsoft also gave up its observer seat on OpenAI's board in 2024. "Our OpenAI partnership and its continued evolution promote competition, innovation, and responsible AI development, and we welcome the CMA's conclusion, after careful and prudent consideration of the commercial realities, to close its investigation," said Microsoft. OpenAI said it "operates in a highly competitive and rapidly evolving industry, and we are focused on developing AI that is safe and beneficial for everyone". In a LinkedIn post, Bamford acknowledged the "exceptionally extended" length of time between the start of the CMA's review and Wednesday's decision, at a time when the agency was under pressure from ministers and industry executives to move more quickly and predictably in its merger reviews. He blamed the complexity and changing nature of partnerships between big tech groups and AI start-ups for the delay. "We are not blind to the length of time that this investigation has taken -- particularly given the reforms we have launched recently which will considerably speed up and streamline the UK mergers process," he said. "We know pace matters to business confidence and investment."

Microsoft's US$13 billion OpenAI tie-up cleared by U.K. watchdog

The Competition and Markets Authority said that the 2023 deal doesn't qualify for a full investigation under merger rules. The CMA said in 2023 it intended to look at whether the partnership gave either of the two firms more control and influence over another. The decision, after around 14 months of scrutiny, removes one UK regulatory uncertainty for Microsoft, which faces a continued investigation into its cloud service offerings. It also comes weeks after the US Federal Trade Commission raised concerns that the deal could extend Microsoft's dominance in cloud computing into the nascent artificial intelligence market. "The CMA found that while Microsoft did acquire material influence over OpenAI in 2019, there has not been a change of control by Microsoft," the CMA said in a statement. Microsoft's bet on OpenAI gave the software maker an early lead over its Big Tech rivals by integrating its products into virtually every corner of its core businesses. Microsoft and Apple Inc. last year dropped plans to take board roles at OpenAI in a decision that underscored the growing regulatory scrutiny. The CMA has been at the forefront of attempts by global regulators to ensure Big Tech's investments into the AI industry don't distort the market or lead to a handful of all-powerful firms. The UK agency voiced its concerns about what it called an "interconnected web" of partnerships and investments in the AI ecosystem. It previously cleared Google's partnership with AI firm Anthropic.

Microsoft's $13 Billion OpenAI Tie-Up Cleared by UK Watchdog

(Bloomberg) -- Microsoft Corp.'s $13 billion investment into OpenAI Inc. was cleared by the UK's antitrust watchdog, ending months of uncertainty over the tie-up. The Competition and Markets Authority said that the 2023 deal doesn't qualify for a full investigation under merger rules. The CMA said in 2023 it intended to look at whether the partnership gave either of the two firms more control and influence over another. The decision, after around 14 months of scrutiny, removes one UK regulatory uncertainty for Microsoft, which faces a continued investigation into its cloud service offerings. It also comes weeks after the US Federal Trade Commission raised concerns that the deal could extend Microsoft's dominance in cloud computing into the nascent artificial intelligence market. "The CMA found that while Microsoft did acquire material influence over OpenAI in 2019, there has not been a change of control by Microsoft," the CMA said in a statement. Microsoft's bet on OpenAI gave the software maker an early lead over its Big Tech rivals by integrating its products into virtually every corner of its core businesses. Microsoft and Apple Inc. last year dropped plans to take board roles at OpenAI in a decision that underscored the growing regulatory scrutiny. There has been mounting government pressure for regulators to speed up decision making, cut red tape and allow more risk to spur the economy. That led to the ouster of its chairman in favor of ex-Amazon Inc. executive Doug Gurr, and a strategic steer too focus on speeding up the decision-making process on interventions, giving more certainty for investors. "We are not blind to the length of time that this investigation has taken," Joel Bamford, the CMA's executive director of mergers, said in a LinkedIn post. The degree of complexity, the changing nature of the partnership and continued dialogue with the companies led to "an exceptionally extended period of review," Bamford said on Wednesday. The CMA's review was part of attempts by global regulators to ensure Big Tech's investments into the AI industry don't distort the market or lead to a handful of all-powerful firms. The agency voiced its concerns about what it called an "interconnected web" of partnerships and investments in the AI ecosystem. It previously cleared Google's partnership with AI firm Anthropic. "We are focused on developing AI that is safe and beneficial for everyone," OpenAI said in a statement. Microsoft's partnership with OpenAI and its continued evolution promote competition, a Microsoft spokesperson said after the decision.

UK watchdog drops competition review of Microsoft's OpenAI partnership

CMA says tie-up does not qualify for an official investigation under Britain's merger control regime The UK's competition watchdog will not hold a formal investigation into Microsoft's partnership with the startup behind the artificial intelligence chatbot ChatGPT, stating that while the $2.9tn (£2.3tn) tech company has "material influence" over OpenAI it does not control it. The Competition and Markets Authority (CMA) said Microsoft, OpenAI's biggest financial backer with a $13bn investment, acquired material influence over the San Francisco-based business in 2019 but did not exercise de facto control over it - and therefore did not meet the threshold for an official inquiry. The decision follows expressions of disquiet over the appointment of the former boss of Amazon UK, Doug Gurr, as the CMA's interim chair. The organisation's chief executive, Sarah Cardell, has also said the CMA does not want to create a "chilling effect" on business confidence, amid pressure from the UK government on regulators to produce pro-growth proposals. The CMA's executive director for mergers, Joel Bamford, said: "We have found that there has not been a change of control by Microsoft from material influence to de facto control over OpenAI. Because this change of control has not happened, the partnership in its current form does not qualify for review under the UK's merger control regime." However, Bamford added that the decision should "not be read as the partnership being given a clean bill of health on competition concerns". The CMA started investigating the OpenAI relationship after the dramatic sacking and reinstatement of Sam Altman as OpenAI's chief executive - over a hectic few days in November 2023, Microsoft announced it had hired Altman, only for him to rejoin the startup. The CMA highlighted a recent reduction in OpenAI's reliance on Microsoft for computer power - a key factor in operating an AI business - as an influence over its decision. A Microsoft spokesperson said the partnership with OpenAI and its continued evolution "promote competition, innovation, and responsible AI development ... We welcome the CMA's conclusion, after careful and prudent consideration of the commercial realities, to close its investigation." Last year, the CMA decided not to investigate Amazon's investment in the AI firm Anthropic and further Microsoft partnerships with the AI firms Mistral and Inflection. Microsoft recently contributed to a funding round that raised $6.6bn for OpenAI and valued the business at $157bn. OpenAI is run by a non-profit board but has a for-profit subsidiary, in which Microsoft is the biggest backer, with returns to investors and employees capped. Despite concerns over Gurr's appointment and the CMA's efforts to avoid a "chilling effect" on the economy, the CMA did target big tech with investigations in January, the month that Gurr was appointed. Google is being investigated over its dominance in internet search and search advertising, while it is also conducting a separate inquiry on the impact of Apple and Google's mobile platforms on consumers and businesses. In January, Microsoft said the CMA was making a "fundamental mistake" in its investigation into the cloud market, after the watchdog said the tech firm was making it harder for Google and Amazon to compete effectively for customers in cloud computing, the term for providing IT services such as data storage and computing power over the internet with a pay-as-you-go pricing structure.

UK antitrust watchdog clears Microsoft's OpenAI partnership.

The Competition and Markets Authority has ruled that the relationship between the two companies "does not qualify for investigation" under merger rules. The CMA said in 2023 that it was assessing whether Microsoft's $13 billion investment into the AI startup gave it de facto control over OpenAI policy. While now satisfied that it doesn't, the CMA says that Microsoft "instead exerts a high level of material influence over that policy."

Microsoft's $13 Billion OpenAI Tie-Up Cleared by UK's CMA

Last year, Microsoft dropped plans to take a board role at OpenAI Microsoft's $13-billion (roughly Rs. 1,13,164 crore) investment into OpenAI Inc. was cleared by the UK's antitrust watchdog, ending months of uncertainty over the tie-up. The Competition and Markets Authority said that the 2023 deal doesn't qualify for a full investigation under merger rules. The CMA said in 2023 it intended to look at whether the partnership gave either of the two firms more control and influence over another. The decision, after around 14 months of scrutiny, removes one UK regulatory uncertainty for Microsoft, which faces a continued investigation into its cloud service offerings. It also comes weeks after the US Federal Trade Commission raised concerns that the deal could extend Microsoft's dominance in cloud computing into the nascent artificial intelligence market. "The CMA found that while Microsoft did acquire material influence over OpenAI in 2019, there has not been a change of control by Microsoft," the CMA said in a statement. Microsoft's bet on OpenAI gave the software maker an early lead over its Big Tech rivals by integrating its products into virtually every corner of its core businesses. Microsoft and Apple last year dropped plans to take board roles at OpenAI in a decision that underscored the growing regulatory scrutiny. The CMA has been at the forefront of attempts by global regulators to ensure Big Tech's investments into the AI industry don't distort the market or lead to a handful of all-powerful firms. The UK agency voiced its concerns about what it called an "interconnected web" of partnerships and investments in the AI ecosystem. It previously cleared Google's partnership with AI firm Anthropic.

Microsoft's OpenAI gets green light from UK watchdog

A UK watchdog has dropped its competition review of Microsoft's OpenAI deal. The UK competition watchdog has dropped its review of Microsoft's partnership with OpenAI, saying it's satisfied that the deal doesn't need a closer investigation under the country's merger rules. The Competition and Markets Authority (CMA) said that based on "available evidence," the partnership between the US tech giant and the ChatGPT maker doesn't qualify for a merger investigation. "In particular the CMA does not consider there has been a change of control by Microsoft from material influence to de facto control over OpenAI," the watchdog said. Microsoft was a big initial backer of OpenAI, plowing billions of dollars into the San Francisco-based startup in its early days. But since then OpenAI has attracted other big investors including Japan's Softbank and chipmaker Nvidia after its success with ChatGPT. "The AI sector is still rapidly evolving. Material aspects of the Partnership have been changing over the course of the investigation," the CMA added in a statement. The CMA has stepped up scrutiny of AI deals amid a wave of investment from Big Tech companies into startups working on generative artificial intelligence (AI). Last year it approved another Microsoft deal involving Inflection AI as well as partnerships with chatbot maker Anthropic by Google and Amazon.

Microsoft-OpenAI Partnership Gets U.K. Antitrust Clearance

U.K. antitrust officials said they wouldn't launch a formal investigation into Microsoft's ties with ChatGPT maker OpenAI, a victory for the tech giant in its bid to justify the partnership to regulators on both sides of the Atlantic. The Competition and Markets Authority launched a review in December 2023 to determine whether Microsoft's investment in OpenAI and its partnership with the artificial-intelligence startup should be considered a de facto merger that might stifle competition in the country. Officials have now concluded this isn't the case and opted not to open a formal probe. "Our OpenAI partnership and its continued evolution promote competition, innovation, and responsible AI development, and we welcome the CMA's conclusion, after careful and prudent consideration of the commercial realities, to close its investigation," a Microsoft spokesperson said. OpenAI didn't immediately respond to a request for comment. News Corp, owner of Dow Jones Newswires and The Wall Street Journal, has a content-licensing partnership with OpenAI.

UK drops antitrust probe into Microsoft and OpenAI tie-up

A Microsoft spokesperson said the partnership with OpenAI and its continued evolution "promote competition, innovation, and responsible AI development". Britain dropped its probe into Microsoft's partnership with ChatGPT maker OpenAI on Wednesday, saying the software giant did not have the level of control over the AI company that would warrant further investigation. The partnership came under antitrust scrutiny in Britain and the U.S. last year following the startup's boardroom battle that led to the exit and return of CEO Sam Altman. Britain's Competition and Markets Authority (CMA) said although Microsoft did acquire material influence over OpenAI in 2019, it had not since gained de facto control and therefore it did not qualify for review under the UK's merger control regime. A Microsoft spokesperson said the partnership with OpenAI and its continued evolution "promote competition, innovation, and responsible AI development". "We welcome the CMA's conclusion, after careful and prudent consideration of the commercial realities, to close its investigation," the spokesperson said.

U.K.'s competition authority says Microsoft's OpenAI partnership doesn't quality for investigation | TechCrunch

Britain's competition authority, the Competition and Markets Authority (CMA), said Wednesday that Microsoft's partnership with OpenAI doesn't qualify for investigation under the merger provisions of the U.K.'s Enterprise Act 2002, the country's anticompetitive practices law. "Overall, taking into account all of the available evidence [...] the CMA does not believe that Microsoft currently controls OpenAI's commercial policy, and instead exerts a high level of material influence over that policy," the CMA wrote in its decision. "In other words there is no change of control giving rise to a relevant merger situation." The CMA began investigating Microsoft's partnership in December 2023. The tech giant is a top investor in OpenAI, having poured nearly $14 billion into the AI startup since 2019. Microsoft also packages many of OpenAI's technologies in a managed offering called the Azure OpenAI Service, and it works closely with OpenAI to develop products like Microsoft's Copilot chatbot and GitHub Copilot AI coding assistant. The CMA was initially concerned that Microsoft acquired control over OpenAI's commercial policy in 2019, and that this control increased following Microsoft's role in securing OpenAI CEO Sam Altman's re-appointment in November 2023. The CMA believed that such control could reasonably be expected to result in a "substantial lessening" of AI industry competition in the U.K. "[A]n increase in Microsoft's control over OpenAI could give rise to potential competition concerns if Microsoft was able to restrict rivals' access to OpenAI's leading models in markets where access to [AI] is likely to be important and where Microsoft already holds strong market positions," the agency wrote in a filing. "The CMA was also concerned that the partnership could potentially impact competition in the emerging market for the supply of accelerated compute, given OpenAI's potential to act as an important customer in this market." But as the CMA noted in its decision Wednesday, recent developments have potentially weakened -- not strengthened -- Microsoft's influence over OpenAI. In January, Microsoft announced that it had renegotiated elements of its cloud computing agreement with OpenAI, moving to a model where Microsoft has the "first right of refusal" for certain OpenAI AI workloads and grants waivers to allow OpenAI to build additional computing capacity including a $500 billion U.S. data center deal with investor SoftBank.

Microsoft-OpenAI partnership not subject to probe, says UK CMA By Investing.com

Investing.com -- The United Kingdom (TADAWUL:4280)'s Competition and Markets Authority (CMA) has concluded that the partnership between Microsoft Corporation (NASDAQ:MSFT) and OpenAI, Inc., a nonprofit organization and its for-profit subsidiary OpenAI OpCo LLC, does not warrant an investigation. This decision comes after an analysis of the complex and evolving relationship between the two entities. Microsoft's partnership with OpenAI has led to it acquiring certain rights related to OpenAI. The terms of this partnership have been changing as Microsoft increases its investment in OpenAI, and the scope of their collaborations expands. The CMA has been monitoring these developments closely. Despite the complex nature of the AI sector and the ongoing changes in the partnership, the CMA does not believe that the current format of the partnership results in a relevant merger situation. Specifically, the CMA does not consider that there has been a shift in control from Microsoft having material influence to de facto control over OpenAI. As a result, the partnership will not be referred under section 22 of the Enterprise Act 2002. The CMA's investigation into whether there has been a change in the level of Microsoft's control over OpenAI has been intricate. It has required careful consideration of the commercial realities of the relationship between the parties, not just the formal terms of the arrangement. This has involved a review of a wide range of evidence, including submissions and responses to information requests from Microsoft and OpenAI, and internal documents regarding developments in OpenAI's governance in November 2023 and how the partnership has operated in practice over time. In conclusion, the CMA does not believe that Microsoft currently controls OpenAI's commercial policy, but instead exerts a high level of material influence over that policy. Therefore, it does not constitute a change of control leading to a relevant merger situation. The CMA reached this conclusion after considering three main potential sources of influence and/or control: Microsoft's investment and involvement in OpenAI's corporate governance, Microsoft's supply of compute, and Microsoft's IP and commercialization rights.

UK says Microsoft/OpenAI partnership does not need antitrust investigation

LONDON, March 5 (Reuters) - Britain's competition authority CMA said on Wednesday it would not investigate Microsoft's <MSFT.O> partnership with ChatGPT OpenAI under the merger provisions of the Enterprise Act 2002. The partnership came under antitrust scrutiny in Britain and the US last year following the startup's boardroom battle that led to the exit and return of CEO Sam Altman. A Microsoft spokesperson said the partnership with OpenAI and its continued evolution "promote competition, innovation, and responsible AI development". "We welcome the CMA's conclusion, after careful and prudent consideration of the commercial realities, to close its investigation," the spokesperson said. Reporting by Muvija M, writing by Sarah Young, editing by Catarina Demony Our Standards: The Thomson Reuters Trust Principles., opens new tab Suggested Topics:Boards, Policy & RegulationRegulatory Oversight

Microsoft-OpenAI Partnership Gets U.K. Antitrust Clearance -- Update

U.K. antitrust officials said they wouldn't launch a formal investigation into Microsoft's ties with ChatGPT maker OpenAI, a victory for the tech giant in its bid to justify the partnership to regulators on both sides of the Atlantic. The Competition and Markets Authority launched a review in December 2023 to determine whether Microsoft's investment in OpenAI and its partnership with the artificial-intelligence startup should be considered a de facto merger that might stifle competition in the country. Officials have now concluded this isn't the case and opted not to open a formal probe. Joel Bamford, executive director of mergers at the CMA, said in a LinkedIn post that while Microsoft did acquire material influence over OpenAI in 2019, Microsoft never gained de facto control of the company. "Because this change of control has not happened, the partnership in its current form does not qualify for review under the U.K.'s merger control regime," Bamford said. The decision, which comes as OpenAI prepares to become a for-profit corporation, marks another win for Microsoft after British regulators last year also cleared the company's hiring of former employees from Inflection AI and its partnership with that startup. "Our OpenAI partnership and its continued evolution promote competition, innovation, and responsible AI development, and we welcome the CMA's conclusion," a Microsoft spokesperson said. An OpenAI spokesperson said the startup also welcomed the decision. "OpenAI operates in a highly competitive and rapidly evolving industry, and we are focused on developing AI that is safe and beneficial for everyone," the spokesperson said. Tech giants have splurged on AI startups since the debut of ChatGPT and a series of other AI offerings ushered in a spending bonanza, but regulators started closing in as those investments gained prominence. Microsoft's partnership with the AI company dates back to 2019, but the tech giant entered the bigger picture as a major investor after OpenAI started gaining traction following the release of ChatGPT in late 2022. Microsoft has invested more than $13 billion in OpenAI since 2019, including its share of the startup's latest $6.6 billion fundraise. OpenAI was founded in 2015 as a nonprofit to safely develop artificial intelligence, but it created a for-profit arm four years later to raise funding. The startup now plans to convert to a for-profit company. Closer scrutiny of that partnership has already forced Microsoft to loosen the strings on some arrangements. Last year, the group relinquished its seat as an observer on OpenAI's board after Microsoft realized its position had unsettled some antitrust officials. The European Union also scrutinized the partnership from a merger-control angle to determine whether Microsoft had acquired control on a lasting basis over OpenAI. The bloc's antitrust regulators concluded that wasn't the case, but said the EU would keep monitoring the relationship. In the U.S., the Federal Trade Commission launched an inquiry into generative AI partnerships last year, including Google owner Alphabet, Amazon.com, Anthropic, Microsoft and OpenAI. The FTC ordered those five companies to provide information on their investments into AI startups. News Corp, owner of Dow Jones Newswires and The Wall Street Journal, has a content-licensing partnership with OpenAI.

UK competition watchdog drops Microsoft-OpenAI probe

The UK competition watchdog has ended its investigation into the partnership between Microsoft and the maker of ChatGPT, OpenAI. The Competition and Markets Authority (CMA) was looking into whether Microsoft's relationship with what is the world's best known artificial intelligence (AI) firm changed after the turmoil which saw its boss Sam Altman fired and then rehired. The CMA has concluded that, despite Microsoft investing billions of dollars into OpenAI and having exclusive uses of some of its AI products, the partnership remains the same, so is not subject to review under the UK's merger rules. Digital rights campaigners, Foxglove, said it showed the CMA had been "defanged."

UK Watchdog Drops Competition Review of Microsoft's OpenAI Deal

LONDON (AP) -- Britain's competition watchdog said Wednesday it has dropped its review of Microsoft's partnership with OpenAI, saying it's satisfied that the deal doesn't need a closer investigation under the country's merger rules. The Competition and Markets Authority said that based on "available evidence," the partnership between the U.S. tech giant and the ChatGPT maker doesn't qualify for a merger investigation. "In particular the CMA does not consider there has been a change of control by Microsoft from material influence to de facto control over OpenAI," the watchdog said in a statement. Microsoft was a big initial backer of OpenAI, plowing billions of dollars into the San Francisco-based startup in its early days. But since then OpenAI has attracted other big investors including Japan's Softbank and chipmaker Nvidia after its success with ChatGPT. The CMA has stepped up scrutiny of AI deals amid a wave of investment from Big Tech companies into startups working on generative artificial intelligence. Last year it approved another Microsoft deal involving Inflection AI as well as partnerships with chatbot maker Anthropic by Google and Amazon. Copyright 2025 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

UK watchdog drops competition review of Microsoft's OpenAI deal

LONDON (AP) -- Britain's competition watchdog said Wednesday it has dropped its review of Microsoft's partnership with OpenAI, saying it's satisfied that the deal doesn't need a closer investigation under the country's merger rules. The Competition and Markets Authority said that based on "available evidence," the partnership between the U.S. tech giant and the ChatGPT maker doesn't qualify for a merger investigation. "In particular the CMA does not consider there has been a change of control by Microsoft from material influence to de facto control over OpenAI," the watchdog said in a statement. Microsoft was a big initial backer of OpenAI, plowing billions of dollars into the San Francisco-based startup in its early days. But since then OpenAI has attracted other big investors including Japan's Softbank and chipmaker Nvidia after its success with ChatGPT. The CMA has stepped up scrutiny of AI deals amid a wave of investment from Big Tech companies into startups working on generative artificial intelligence. Last year it approved another Microsoft deal involving Inflection AI as well as partnerships with chatbot maker Anthropic by Google and Amazon.

UK watchdog drops competition review of Microsoft's OpenAI deal

LONDON -- Britain's competition watchdog said Wednesday it has dropped its review of Microsoft's partnership with OpenAI, saying it's satisfied that the deal doesn't need a closer investigation under the country's merger rules. The Competition and Markets Authority said that based on "available evidence," the partnership between the U.S. tech giant and the ChatGPT maker doesn't qualify for a merger investigation. "In particular the CMA does not consider there has been a change of control by Microsoft from material influence to de facto control over OpenAI," the watchdog said in a statement. Microsoft was a big initial backer of OpenAI, plowing billions of dollars into the San Francisco-based startup in its early days. But since then OpenAI has attracted other big investors including Japan's Softbank and chipmaker Nvidia after its success with ChatGPT. The CMA has stepped up scrutiny of AI deals amid a wave of investment from Big Tech companies into startups working on generative artificial intelligence. Last year it approved another Microsoft deal involving Inflection AI as well as partnerships with chatbot maker Anthropic by Google and Amazon.

CMA closes inquiry into Microsoft's $13B OpenAI funding

Redmond doesn't have total control over GPT maker so we lack authority, say monopoly cops The UK's investigation into competition concerns arising from Microsoft's $13 billion investment in OpenAI has reached a conclusion, albeit an anticlimactic one in which officials have left loose ends. The Competition and Markets Authority (CMA) today confirmed the closure of its examinination into Microsoft's alliance with OpenAI, conducted as a merger inquiry, after deciding it didn't qualify for additional digging under that scope. This is despite the CMA's conclusion that Microsoft "exerts a high level of material influence" over OpenAI's commercial policy. Yet as it's not a controlling influence there's no relevant merger situation to be scrutinized further, and so the CMA lacks jurisdiction. "The CMA has not had to conclude on whether the other criteria for establishing a relevant merger situation are met," the decision document states. "The CMA has also not had to conclude on whether the Partnership has resulted, or may be expected to result, in a [substantial lessening of competition] in the UK." "A finding that the Partnership does not give rise to a relevant merger situation does not constitute a finding that no competition concerns arise from its operation," the CMA added. Microsoft and OpenAI, predictably, celebrated confirmation of the investigation being shuttered. "Our OpenAI partnership and its continued evolution promote competition, innovation, and responsible AI development, and we welcome the CMA's conclusion, after careful and prudent consideration of the commercial realities, to close its investigation," a Microsoft spokesperson told The Register. "We welcome the CMA's decision to close its investigation after its thoughtful evaluation," OpenAI told us. "OpenAI operates in a highly competitive and rapidly evolving industry, and we are focused on developing AI that is safe and beneficial for everyone." Microsoft has ploughed more than $13 billino into a "partnership" with OpenAI since 2019, with the biggest sum ($10 billion) coming in January 2023. Other cloud giants have similarly invested billions of dollars in AI start-ups, with Anthropic, for example, attracting funding from AWS and Google. The CMA is still pouring over Amazon's relationship with Anthropic. The CMA's decision today echoes the European Commission's conclusion in April 2024 that while Microsoft had influence over OpenAI, it did not have much control at first glance. The EC has nonetheless vowed to continue digging into the matter, with former Commission EVP Margrethe Vestager saying last June that she was concerned agreements like Microsoft's with OpenAI were merely a way to avoid merger scrutiny. "We have to make sure that partnerships like this do not become a disguise for one partner getting a controlling influence over the other," Vestager noted at the time. The US Federal Trade Commission has also looked into competition concerns stemming from partnerships and investments between tech giants and AI startups with many of the same root concerns as the CMA and EC. Like the European reviews, the FTC examined whether tie ups acted as de facto mergers that put big tech in control and lessened competition. The FTC released a report on the matter days before President Donald Trump took office in January 2025, concluding that while there were reasons to monitor the deals, it would not take further investigative action. "The FTC's report sheds light on how partnerships by big tech firms can create lock-in, deprive start-ups of key AI inputs, and reveal sensitive information that can undermine fair competition," then-FTC chair Lina Khan said. We've reached out to the FTC to learn whether it is still investigating the Microsoft/OpenAI partnership.

UK watchdog drops competition review of Microsoft's OpenAI deal

Britain's competition watchdog said Wednesday it has dropped its review of Microsoft's partnership with OpenAI, saying it's satisfied that the deal doesn't need a closer investigation under the country's merger rules. The Competition and Markets Authority said that based on "available evidence," the partnership between the U.S. tech giant and the ChatGPT maker doesn't qualify for a merger investigation. "In particular the CMA does not consider there has been a change of control by Microsoft from material influence to de facto control over OpenAI," the watchdog said in a statement. Microsoft was a big initial backer of OpenAI, plowing billions of dollars into the San Francisco-based startup in its early days. But since then OpenAI has attracted other big investors including Japan's Softbank and chipmaker Nvidia after its success with ChatGPT. The CMA has stepped up scrutiny of AI deals amid a wave of investment from Big Tech companies into startups working on generative artificial intelligence. Last year it approved another Microsoft deal involving Inflection AI as well as partnerships with chatbot maker Anthropic by Google and Amazon. © 2025 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.

Microsoft Dodges UK Competition Crackdown Over OpenAI Deal, Watchdog Director Says Partnership Doesn't Get 'A Clean Bill Of Health' - Microsoft (NASDAQ:MSFT), SoftBank Group (OTC:SFTBF)

On Wednesday, the U.K.'s Competition and Markets Authority ruled that Microsoft Corporation's MSFT $13 billion investment in OpenAI does not warrant a formal merger investigation. What Happened: The CMA announced that Microsoft's investment in OpenAI does not constitute a merger, as there was no "change of control" giving Microsoft "de facto control" over the AI startup, reported the Financial Times. This decision follows months of scrutiny into whether Microsoft's stake in OpenAI could stifle competition in the AI market. See Also: Microsoft Unveils AI-Powered Dragon Copilot To Ease Clinician Workloads The regulator pointed to "recent developments" that have reduced OpenAI's dependence on Microsoft, including its newly formed $100 billion AI infrastructure partnership with SoftBank Group SFTBY SFTBF. The CMA's executive director for mergers, Joel Bamford, cautioned that this decision "should not be read as the partnership being given a clean bill of health on potential competition concerns." Why It Matters: The decision marks a win for Microsoft, allowing it to continue its lucrative partnership with OpenAI without immediate regulatory hurdles. Meanwhile, it has also been reported that SoftBank is currently in discussions to spearhead a new funding round for OpenAI, aiming to raise $40 billion. This investment could push the ChatGPT creator's valuation to $300 billion, marking a record-breaking funding round for a private company. Price Action: Microsoft's stock closed Wednesday at $401.02, rising 3.19%. However, it dipped 0.25% in after-hours trading. Year-to-date, the stock is down 4.20%, according to Benzinga Pro data. Photo Courtesy: Shutterstock.com Read Next: Intel Beats Investor Lawsuit After $32 Billion Stock Plunge -- Judge Rules Foundry Losses Weren't Misleading Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors. MSFTMicrosoft Corp$400.032.94%OverviewSFTBFSoftBank Group Corp$62.2715.9%SFTBYSoftBank Group Corp$27.173.78%Market News and Data brought to you by Benzinga APIs