UK Launches Probe into Microsoft's Hiring of Inflection AI Staff

Microsoft faces UK competition investigation over AI start-up hires

Microsoft's hiring of employees from artificial intelligence (AI) start-up Inflection will undergo an intitial investigation by British authorities over concerns that it could thwart competition in the booming AI market. The UK's Competition and Markets Authority said on Tuesday its review of the hirings from Inflection AI, including its co-founder and CEO Mustafa Suleyman, turned up "sufficient information" to open an investigation. Microsoft hired Suleyman to head up its consumer AI business earlier this year, and brought over several top engineers and researchers. Suleyman co-founded the AI research lab DeepMind, which is now owned by Google, before setting up Inflection and is considered an influential figure in the AI world. The watchdog has indicated that it was assessing whether the hirings amount to a merger that results in "a substantial lessening of competition" in the UK's AI market, in breach of the country's antitrust rules. "We are confident that the hiring of talent promotes competition and should not be treated as a merger," Microsoft said in a statement. "We will provide the UK Competition and Markets Authority with the information it needs to complete its inquiries expeditiously". The British watchdog has until September 11 to decide whether to give its approval or escalate the probe into an in-depth investigation. The authority has the power to reverse deals or impose fixes to address competition concerns. Authorities on both sides of the Atlantic have become concerned about how the biggest technology companies are gobbling up the talent and products of innovative AI start-ups without formally acquiring them. Three members of the US Senate wrote last week to antitrust enforcers at the Justice Department and the Federal Trade Commission, urging them to investigate Amazon's deal with San Francisco-based Adept. The deal will result in Adept's CEO and key employees going to Amazon and giving the e-commerce giant a license to Adept's AI systems and datasets.

Microsoft's hiring of Inflection AI staff probed by UK regulator

The UK competition watchdog has officially launched an inquiry into Microsoft's hiring of staff from start-up Inflection AI, as global regulatory scrutiny of investments by technology groups deepens. The Competition and Markets Authority said on Tuesday that it had "sufficient information" in relation to Microsoft's hiring of "certain former employees of Inflection AI and its entry into associated arrangements with Inflection, to enable it to begin an investigation". The move to launch a formal merger inquiry comes after the regulator in April invited comments about the Microsoft-Inflection tie-up, as part of broader concerns about dealmaking in the fast-developing AI industry. The CMA said the deadline for it to escalate its probe to the next level was September 11. Microsoft said it was "confident that the hiring of talent promotes competition" and that the Inflection deal "should not be treated as a merger". The tech group added that it would provide the CMA with "the information it needs to complete its inquiries expeditiously". Microsoft, which participated in a $1.3bn funding round for Inflection last year, paid $650mn in March to hire the start-up's chief executive Mustafa Suleyman, co-founder of Google's DeepMind, alongside several other team members, and to license its technology. Inflection was founded as a consumer AI company in 2022, with a chatbot product called Pi. Since March, it has pivoted to selling enterprise AI software to businesses after most of its staff left to join Microsoft. The move drew scrutiny from regulators and legal experts on grounds that it looked similar to an acquisition by Microsoft but was not subject to formal acquisition rules. The CMA said in April that it was seeking views on whether the partnerships struck by Microsoft and Amazon with AI start-ups, including Microsoft's deal with Inflection, "fall within UK merger rules". Microsoft and Inflection stressed at the time that the agreement was not an acquisition and that Inflection remained an independent company. The tie-up is far from the only Big Tech AI deal that has drawn the attention of regulators in the US, EU and UK. Microsoft this month gave up its seat as an observer on the board of OpenAI while Apple said it would not take up a similar position, amid growing attention by global regulators on investments in AI start-ups. The European Commission said in June it was exploring the possibility of an antitrust investigation into the Microsoft-OpenAI tie-up after it said it would not proceed with a probe under merger control rules. The Federal Trade Commission in the US has also begun scrutinising investments made by big tech companies including Microsoft, Amazon and Google into generative AI start-ups.

Microsoft's hiring of former Inflection AI staff prompts UK probe

UK's CMA is investigating Microsoft's $650 million deal and hiring of Inflection AI staff, founded in 2022 by Mustafa Suleyman, involving investors Eric Schmidt and Bill Gates. Decision due Sept. 11. Microsoft's ties with OpenAI, Mistral AI, Amazon-Anthropic are under review. Microsoft, relinquishing an OpenAI board seat, asserts hiring promotes competition in an emailed statement.Britain's competition regulator has started a formal investigation into Microsoft's hiring of some former staff of Inflection AI and its partnership with the startup, it said on Tuesday. Over the past 18 months, regulators around the world have increasingly focused on potentially anti-competitive behaviour in the AI industry, with Microsoft's various deals with smaller startups facing mounting scrutiny. In March, the tech giant hired Mustafa Suleyman, co-founder of Google DeepMind, as head of its newly-created AI unit. It also hired a number of employees from Inflection, which he set up in 2022. Reuters reported that Microsoft had agreed to pay Inflection about $650 million as part of the deal. This allowed it access to Inflection's AI models, and enabled the startup to reimburse its investors, who include former Google CEO Eric Schmidt and Bill Gates. Responding to the UK Competition and Markets Authority's (CMA) investigation, a Microsoft spokesperson said in an emailed statement to Reuters: "We are confident that the hiring of talent promotes competition and should  not be treated as a merger. "We will provide the UK Competition and Markets Authority with the information it needs to complete its enquiries expeditiously." The CMA has until Sept. 11 to decide whether or not it would refer the deal for a more in-depth investigation. Microsoft was already facing questions over its partnerships with leading AI startups such as OpenAI and France's Mistral AI. Last week, it gave up its board observer seat at OpenAI in a move aimed at easing U.S. and British antitrust regulators' concerns about the extent of its control over the AI startup. The CMA has also sought views on partnerships between Amazon and Anthropic.

Microsoft's hiring of former Inflection AI staff prompts UK probe

Britain's competition regulator has started a formal investigation into Microsoft's hiring of some former staff of Inflection AI and its partnership with the startup, it said on Tuesday. Over the past 18 months, regulators around the world have increasingly focused on potentially anti-competitive behaviour in the AI industry, with Microsoft's various deals with smaller startups facing mounting scrutiny. In March, the tech giant hired Mustafa Suleyman, co-founder of Google DeepMind, as head of its newly-created AI unit. It also hired a number of employees from Inflection, which he set up in 2022. Reuters reported that Microsoft had agreed to pay Inflection about $650 million as part of the deal. This allowed it access to Inflection's AI models, and enabled the startup to reimburse its investors, who include former Google CEO Eric Schmidt and Bill Gates. Apple, Microsoft drop board observer seats at OpenAI (For top technology news of the day, subscribe to our tech newsletter Today's Cache) Responding to the UK Competition and Markets Authority's (CMA) investigation, a Microsoft spokesperson said in an emailed statement to Reuters: "We are confident that the hiring of talent promotes competition and should  not be treated as a merger. "We will provide the UK Competition and Markets Authority with the information it needs to complete its enquiries expeditiously." The CMA has until September 11 to decide whether or not it would refer the deal for a more in-depth investigation. Microsoft was already facing questions over its partnerships with leading AI startups such as OpenAI and France's Mistral AI. Last week, it gave up its board observer seat at OpenAI in a move aimed at easing U.S. and British antitrust regulators' concerns about the extent of its control over the AI startup. The CMA has also sought views on partnerships between Amazon and Anthropic. Read Comments

Microsoft's hiring of former Inflection AI staff prompts UK probe - ET Telecom

By Yadarisa Shabong and Martin Coulter Britain's competition regulator has started a formal investigation into Microsoft's hiring of some former staff of Inflection AI and its partnership with the startup, it said on Tuesday. Over the past 18 months, regulators around the world have increasingly focused on potentially anti-competitive behaviour in the AI industry, with Microsoft's various deals with smaller startups facing mounting scrutiny. In March, the tech giant hired Mustafa Suleyman, co-founder of Google DeepMind, as head of its newly-created AI unit. It also hired a number of employees from Inflection, which he set up in 2022. Reuters reported that Microsoft had agreed to pay Inflection about $650 million as part of the deal. This allowed it access to Inflection's AI models, and enabled the startup to reimburse its investors, who include former Google CEO Eric Schmidt and Bill Gates. Responding to the UK Competition and Markets Authority's (CMA) investigation, a Microsoft spokesperson said in an emailed statement to Reuters: "We are confident that the hiring of talent promotes competition and should  not be treated as a merger. "We will provide the UK Competition and Markets Authority with the information it needs to complete its enquiries expeditiously." The CMA has until Sept. 11 to decide whether or not it would refer the deal for a more in-depth investigation. Microsoft was already facing questions over its partnerships with leading AI startups such as OpenAI and France's Mistral AI. Last week, it gave up its board observer seat at OpenAI in a move aimed at easing U.S. and British antitrust regulators' concerns about the extent of its control over the AI startup. The CMA has also sought views on partnerships between Amazon and Anthropic.

Microsoft's Hiring From This AI Startup Brings UK Regulator Scrutiny - News18

(Reuters) - Britain's competition regulator has started a formal investigation into Microsoft's hiring of some former staff of Inflection AI and its partnership with the startup, it said on Tuesday. Over the past 18 months, regulators around the world have increasingly focused on potentially anti-competitive behaviour in the AI industry, with Microsoft's various deals with smaller startups facing mounting scrutiny. In March, the tech giant hired Mustafa Suleyman, co-founder of Google DeepMind, as head of its newly-created AI unit. It also hired a number of employees from Inflection, which he set up in 2022. Reuters reported that Microsoft had agreed to pay Inflection about $650 million as part of the deal. This allowed it access to Inflection's AI models, and enabled the startup to reimburse its investors, who include former Google CEO Eric Schmidt and Bill Gates. Responding to the UK Competition and Markets Authority's (CMA) investigation, a Microsoft spokesperson said in an emailed statement to Reuters: "We are confident that the hiring of talent promotes competition and should  not be treated as a merger. "We will provide the UK Competition and Markets Authority with the information it needs to complete its enquiries expeditiously." The CMA has until Sept. 11 to decide whether or not it would refer the deal for a more in-depth investigation. Microsoft was already facing questions over its partnerships with leading AI startups such as OpenAI and France's Mistral AI. Last week, it gave up its board observer seat at OpenAI in a move aimed at easing U.S. and British antitrust regulators' concerns about the extent of its control over the AI startup. The CMA has also sought views on partnerships between Amazon and Anthropic.

UK antitrust agency begins probe into Microsoft hiring ex Inflection AI employees

The Competition and Markets Authority, the U.K.'s antitrust agency, said on Tuesday that it has begun probing Microsoft's (NASDAQ:MSFT) hiring of former Inflection AI employees on grounds that it may have resulted in a "substantial lessening of competition." The initial period of the inquiry will last until Sept. 11, when the agency will announce its decision whether to refer the deal for a Phase 2 investigation, the CMA said in a statement. Microsoft shares were down fractionally in premarket trading. The CMA said in April that it was looking for comment from companies on a number of artificial intelligence deals between big tech companies and startups, including Microsoft and Inflection AI, Microsoft's deal with Mistral AI; and Amazon (AMZN)'s deal with Anthropic. Mistral recently raised $643M in funding, giving it a $6B valuation. Microsoft announced in March that it had hired Inflection AI's co-founders Mustafa Suleyman and Karén Simonyan, with Suleyman set to run Microsoft's consumer AI unit. The company also hired most of Inflection's employees and said it would pay the startup roughly $650M in licensing fees to resell it technology. As part of the management change, Suleyman is now leading teas at Microsoft that focus on Copilot, Bing and Edge. It was reported in June that the Federal Trade Commission was investigating whether the deal between Microsoft and Inflection AI was structured in a way to avoid a government scrutiny. Microsoft has invested in several AI startups, including putting multiple billions of dollars into ChatGPT creator OpenAI.

Microsoft's hiring of former Inflection AI staff prompts UK probe

In March, the tech giant hired Mustafa Suleyman, co-founder of Google DeepMind, as head of its newly-created AI unit. It also hired a number of employees from Inflection, which he set up in 2022. Reuters reported that Microsoft had agreed to pay Inflection about $650 million as part of the deal. This allowed it access to Inflection's AI models, and enabled the startup to reimburse its investors, who include former Google CEO Eric Schmidt and Bill Gates. Responding to the UK Competition and Markets Authority's (CMA) investigation, a Microsoft spokesperson said in an emailed statement to Reuters: "We are confident that the hiring of talent promotes competition and should  not be treated as a merger. "We will provide the UK Competition and Markets Authority with the information it needs to complete its enquiries expeditiously." The CMA has until Sept. 11 to decide whether or not it would refer the deal for a more in-depth investigation. Microsoft was already facing questions over its partnerships with leading AI startups such as OpenAI and France's Mistral AI. Last week, it gave up its board observer seat at OpenAI in a move aimed at easing U.S. and British antitrust regulators' concerns about the extent of its control over the AI startup. The CMA has also sought views on partnerships between Amazon and Anthropic. (Reporting by Yadarisa Shabong in Bengaluru and Martin Coulter in London; Editing by Anil D'Silva and Emelia Sithole-Matarise)

Microsoft faces UK competition investigation

LONDON (AP) -- British regulators opened a preliminary investigation on Tuesday into Microsoft's hiring of an AI startup's key staff over concerns that it could thwart competition in the booming artificial intelligence market. The Competition and Markets Authority said its review of the hirings from Inflection AI, including its co-founder and CEO Mustafa Suleyman, turned up "sufficient information" to open an investigation. Microsoft hired Suleyman to head up its consumer artificial intelligence business earlier this year, and brought over several top engineers and researchers. Suleyman co-founded the AI research lab DeepMind, which is now owned by Google, before setting up Inflection and is considered an influential figure in the AI world. The watchdog has indicated that it was assessing whether the hirings amount to a merger that results in "a substantial lessening of competition" in the UK 's AI market, in breach of the country's antitrust rules. "We are confident that the hiring of talent promotes competition and should not be treated as a merger," Microsoft said in a statement. "We will provide the UK Competition and Markets Authority with the information it needs to complete its inquiries expeditiously." The British watchdog has until September 11 to decide whether to give its approval or escalate the probe into an in-depth investigation. The authority has the power to reverse deals or impose fixes to address competition concerns. Authorities on both sides of the Atlantic have become concerned about how the biggest technology companies are gobbling up the talent and products of innovative AI startups without formally acquiring them. Three members of the US Senate wrote last week to antitrust enforcers at the Justice Department and the Federal Trade Commission, urging them to investigate Amazon's deal with San Francisco-based Adept. The deal will result in Adept's CEO and key employees going to Amazon and giving the e-commerce giant a licence to Adept's AI systems and datasets.

Microsoft deal with AI startup to be investigated by UK competition watchdog

CMA 'has enough evidence' to start full probe into tech giant's hiring of Inflection's top staff The Competition and Markets Authority (CMA) has launched a full investigation into Microsoft's deal with AI startup Inflection. Earlier this year, Mustafa Suleyman - who started Inflection in January 2022, two months after leaving Google - and a number of his colleagues were hired by Microsoft to lead the tech company's new AI division. At the same time, Microsoft signed deals with Inflection to access its AI models. The arrangement was criticised by regulators at the time as it avoided the regulatory attention of an outright acquisition. In April, the UK regulator said it was "considering whether it is or may be the case that the transaction has resulted in the creation of a relevant merger", and opened a three-month comment period. It now has enough evidence to begin a full investigation, it said, with a decision on whether progress to the next stage due by 11 September. A Microsoft spokesperson said: "We are confident that the hiring of talent promotes competition and should not be treated as a merger. We will provide the UK Competition and Markets Authority with the information it needs to complete its inquiries expeditiously." At the time of the Microsoft and Inflection AI tie up, the EU antitrust chief, Margrethe Vestager, said: "We have registered that this is happening and also registering that it's happening in a way so that it escapes our scrutiny from our usual boxes." The CMA's move comes amid broader concerns about competition in the AI sector. Another deal involving Microsoft and French AI startup Mistral was investigated by the CMA at the same time as the Inflection inquiry, though the regulator later dropped its investigation. A deal between Amazon and AI lab Anthropic is also being investigated by the CMA as a potential merger. Anthropic has committed to using Amazon Web Services as its primary cloud provider, while Amazon has taken a $4bn (£3bn) stake in the company, which develops the Claude LLM. Meanwhile, ChatGPT maker OpenAI took a substantial investment from Microsoft in 2019. This was paid in part in credits for its cloud computing service. Last week, Microsoft dropped its "observer" seat on the board of OpenAI. Instead, Microsoft and Apple, which had been about to take up a similar role, will attend "regular stakeholder meetings", an OpenAI spokesperson said. The CMA is also investigating the relationship between Microsoft and OpenAI, after the former took a substantial stake in the latter's for-profit arm. OpenAI once described the stake as making Microsoft the "minority owner" but this was quietly updated to note the company simply had a "minority economic interest".

Microsoft's hiring of Inflection AI co-founder, other employees triggers probe in the UK - Times of India

Microsoft, in March, acquired Inflection AI and hired its staff to join its new AI division. Now, Britain's competition regulator has started a formal investigation (phase 1) into the tech giant's partnership with the startup under merger rules. "The Competition and Markets Authority (CMA) is considering whether it is or may be the case that Microsoft Corporation's hiring of certain former employees of Inflection and its entry into associated arrangements with Inflection has resulted in the creation of a relevant merger situation under the merger provisions of the Enterprise Act 2002," the regulator announced on Tuesday (July 16). The CMA has set September 11 as the deadline to decide whether the investigation will progress into a second phase. If it happens, this may lead to an antitrust battle, presenting a stumbling block for Microsoft's AI plans. Why CMA is investigating Microsoft-Inflection AI deal In March, the tech giant hired Mustafa Suleyman, co-founder of Google DeepMind, as head of its newly-created AI unit. Along with Suleyman, Microsoft also hired a number of employees from Inflection as a part of the deal which is reported to have cost the Windows-maker $650 million. The CMA said it will find whether the creation of merger has resulted, or may be expected to result, "in a substantial lessening of competition within any market or markets in the United Kingdom for goods or services." Previously, the CMA also signalled interest in Microsoft's Mistral AI partnership but later decided that it didn't qualify for further probe. Microsoft already faced questions over its partnerships with ChatGPT-maker OpenAI. What Microsoft has to say Responding to the UK Competition and Markets Authority's (CMA) investigation, a Microsoft spokesperson told news agency Reuters: "We are confident that the hiring of talent promotes competition and should not be treated as a merger." "We will provide the UK Competition and Markets Authority with the information it needs to complete its enquiries expeditiously," the spokesperson added. The CMA has also sought views on partnerships between Amazon and Anthropic. The TOI Tech Desk is a dedicated team of journalists committed to delivering the latest and most relevant news from the world of technology to readers of The Times of India. TOI Tech Desk's news coverage spans a wide spectrum across gadget launches, gadget reviews, trends, in-depth analysis, exclusive reports and breaking stories that impact technology and the digital universe. Be it how-tos or the latest happenings in AI, cybersecurity, personal gadgets, platforms like WhatsApp, Instagram, Facebook and more; TOI Tech Desk brings the news with accuracy and authenticity.

UK Investigates Microsoft's AI Licensing Deal with Inflection

UK's Competition and Markets Authority (CMA) started an investigation into Microsoft's deal with the AI startup Inflection on July 16. The company entered into a licensing deal with Inflection in March this year. It agreed to pay $650 million in cash to gain access to Inflection AI's models and hire some of its employees, including the co-founders. Microsoft even brought on Mustafa Suleyman, one of the founders of Inflection to lead its AI Copilot service. CMA says that it will decide whether there is a need for a second phase of investigation into the deal by September 11, 2024. CMA conducted a consultation in April to identify whether this deal has competition concerns. The key question for this consultation was whether the deal created a merger situation under the UK's Enterprise Act 2002 which can lessen the competition within any market in the UK. Open and fair competition in the markets for AI Foundation Models (FM) has three interlinked risks, according to the CMA. These are: Similar competition concerns are anticipated in the generative AI market in other jurisdictions as well. Incidentally, the US Federal Trade Commission (FTC) highlighted in a 2023 blog post how control over data access, talent pool and adjacent markets can make AI development anti-competitive. Meanwhile, India has called for proposals to understand the competition concerns within the AI market in April this year.

Microsoft hires from Inflection AI under the CMA's microscope

THE competition watchdog has launched an inquiry into Microsoft's hiring of ex employees from Inflection AI, a US-based startup Microsoft invested in last year. The Competition and Markets Authority (CMA) announced on Tuesday it has "sufficient information" to open an investigation into Microsoft's recruitment of certain ex-Inflection AI staff and the tech giant's related arrangements with Inflection. The CMA said it "is considering whether it is or may be the case that hiring of former employees of Inflection and its entry into associated arrangements has resulted in the creation of a relevant merger." Microsoft has arrangements with Inflection AI, which is building a 'personal' AI for everyone, such as a non-exclusive licensing deal for it to use the startup's existing models. The CMA set an 11 September deadline to decide if it will progress to a phase two investigation.

Microsoft, Inflection AI deal earns UK merger investigation

AI supremacy is a helluva drug, and Microsoft's old habits die hard UK antitrust regulators today announced the beginning of a merger inquiry into Microsoft's cash deal with startup Inflection AI, which included poaching employees. The Competition and Markets Authority's (CMA) concern stems from the hiring of Inflection AI cofounders Mustafa Suleyman and Karén Simonyan, along with "several members" of the Inflection team, who left for Microsoft in March. Suleyman, who has been accused of mistreating subordinates at previous positions, now serves as CEO of Microsoft's AI division, while Simonyan is the group's chief scientist. Those hires, and a $650 million (£502m) deal that gave Microsoft access to Inflection's models, have the CMA wondering if competition might be lessened on the isles as a result. UK officials have been inspecting the matter since April, when the CMA said it wanted input from third parties on whether the Microsoft/Inflection AI deal, and Amazon's $4 billion investment in Anthropic, fell within UK merger guidelines despite not being formal company acquisitions. It's not clear if the Amazon case, opened the same day as the Microsoft one and with the same deadlines for public comment, will be progressing. The CMA didn't respond to questions to that end by the time of publication. On Microsoft, however, UK competition watchdogs are ready to pounce. The CMA said it "has sufficient information in relation to Microsoft Corporation's hiring of certain former employees of Inflection AI, Inc. and its entry into associated arrangements with Inflection to enable it to begin an investigation," the CMA said in its notice [PDF]. Mergers in the UK rise to the level of a "relevant merger situation" that requires investigation in instances where "two or more enterprises have ceased to be distinct", and either the deal exceeds a £70 million threshold or could affect at least 25 percent of a national supply of a good or service. Given Inflection AI continues on as an independent company, and that the CMA even admits [PDF] Microsoft's half-billion plus dollar deal with the company was for non-exclusive access to its models, the investigation's outcome may not be guaranteed. The Phase One merger inquiry that launched today will last until September 11, by which point the CMA is scheduled to determine whether to forward the case along for a more in-depth "phase 2" investigation. CMA officials declined to comment on the case, saying it was too early to add anything beyond what had been published online. Even if Microsoft manages to escape the wrath of the CMA in this case it won't be free of regulatory scrutiny elsewhere. The US Federal Trade Commission opened an investigation into the Microsoft/Inflection AI matter in early June, saying it was curious whether the talent acquisition and cash investment were essentially a merger in everything but name. The FTC is also inspecting Microsoft's close relationship with OpenAI amid concerns the pair have an unfair advantage over the competition. And things aren't going much better in the EU, where antitrust chief Margrethe Vestager said in April that officials were aware of Microsoft's deal with Inflection AI. Vestager mentioned Microsoft and Inflection AI in a speech late last month, saying the Commission was examining whether the deal was designed to avoid antitrust scrutiny. "We will make sure these practices don't slip through our merger control rules if they basically lead to a concentration," Vestager said at the time. The European Commission told us that it is still analyzing the Microsoft/Inflection AI deal from an antitrust perspective, and if it decides the deal amounts to a merger Microsoft might already be in trouble. "From a merger perspective ... this transaction has not been formally notified to the Commission," an EC spokesperson told us. "If a transaction constitutes a concentration and has an EU dimension, it is always up to the companies to notify it to the Commission." The EU is also investigating Microsoft's deal with French AI startup Mistral after Microsoft invested €15 million ($16.3 million) in the firm days after it released a ChatGPT competitor. Neither Microsoft nor Inflection AI responded to questions for this story. ®

Microsoft faces UK antitrust probe after hiring Inflection AI founders and employees | TechCrunch

Microsoft is facing a full regulatory probe in the U.K. after the tech giant hired the core team behind Inflection AI, a U.S.-based OpenAI rival Microsoft had previously invested in. The Competition and Markets Authority (CMA) today announced that it's launching a "phase 1" merger inquiry, which kicks off a 40-working day investigative period where it will gather evidence and decide whether to proceed with a full probe. The news comes four months after Microsoft CEO Satya Nadella launched a new consumer AI division spearheaded by the founders of Inflection AI, including deep learning scientist Karén Simonyan and Google DeepMind co-founder Mustafa Suleyman. At the same time, Nadella confirmed that a number of other Inflection AI members had joined Microsoft's new AI unit (Bloomberg reported that most actually joined), one of whom was Jordan Hoffmann, an AI scientist and engineer who is now heading up Microsoft's U.K. AI hub in London. At the heart of the concerns is that big tech companies are adopting a new M&A approach designed to circumvent regulatory scrutiny around AI, in what some have dubbed the "quasi-merger" which may involve anything from strategic investments to scooping up startup founders and technical talent. Today's announcement doesn't come as a massive surprise, as the CMA revealed in April that it was conducting preliminary enquiries into a triumvirate of AI partnerships. One of those was Microsoft's recent investment in Mistral AI, a French startup (and double unicorn) working on AI foundation models. It didn't take long for the CMA to conclude that the investment didn't qualify for investigation under current merger regulations, given that Microsoft's stake of less than 1% wouldn't give the tech giant any meaningful clout in the future direction of the startup. The CMA is also currently looking at Amazon's $4 billion investment in U.S.-based AI company Anthropic, while it is also expected to launch a full probe into Microsoft's close partnership with ChatGPT-maker OpenAI, similar to the European Commission in the EU. With the phase 1 inquiry now under way, the CMA has until September 11 to reach a decision on whether the hiring is tantamount to a "merger," and if it is, whether it's likely to damage competition in the United Kingdom. If the CMA decides that it does, it will then proceed the case to a more in-depth "phase 2" probe which can take around six months.

Microsoft Faces U.K. Competition Probe Over Inflection AI Ties

U.K. antitrust officials are weighing whether Microsoft's hiring of certain former employees of Inflection AI and its ties to the startup are a threat to competition. The Competition and Markets Authority said it was looking into whether a partnership between the tech giant and the AI startup should be considered a de facto merger that might stifle competition within any market or markets in the U.K. for goods or services. The regulator has until Sept. 11 to make an initial decision. Microsoft didn't immediately respond to a request for comment.

Microsoft's hiring of staff from AI startup Inflection referred for UK merger probe

Mustafa Suleyman, co-founder and chief executive officer of Inflection AI UK Ltd., speaks at the World Economic Forum in Davos, Switzerland, on Jan. 18, 2024. Microsoft's hiring of certain former employees from artificial intelligence startup Inflection has been referred for an initial merger investigation in the U.K. Britain's Competition and Markets Authority (CMA) said Tuesday that the hiring of Mustafa Suleyman, Inflection's co-founder, along with most of the startup's staff, should be assessed to decide whether it constitutes a merger under U.K. rules and therefore could result in less competition within the AI sector. If it finds reason to investigate further, the CMA can refer the case for an in-depth investigation, known as a "Phase 2" probe. The CMA said it would announce a decision on whether to refer the case for a Phase 2 investigation by Sept. 11.

Microsoft's Hiring of Inflection AI Staff Faces Competition Inquiry

By THE PRESS ASSOCIATION (Martyn Landi, PA Technology Correspondent) The UK's competition watchdog has launched an investigation into Microsoft's hiring of senior figures from start-up Inflection AI, having previously raised concerns about close partnerships between firms in the sector. The Competition and Markets Authority (CMA) said it was looking into Microsoft's hiring of former Inflection staff, as well as "entry into associated arrangements" by Microsoft with the AI firm as part of a merger inquiry.

Microsoft faces UK antitrust probe over Inflection AI ties

Earlier this year, Microsoft hired Inflection AI's co-founder and almost all of its employees and agreed to pay the startup around $650 million as part of a licensing fee to resell its technology. The Competition and Markets Authority said it was considering whether Microsoft's ties with Inflection AI should be considered a de facto merger that might stifle competition in the U.K., with an initial decision due by Sept. 11. "We are confident that the hiring of talent promotes competition and should  not be treated as a merger," a Microsoft spokesperson said. " We will provide the U.K. Competition and Markets Authority with the information it needs to complete its enquiries expeditiously." The U.K. probe follows the Federal Trade Commission opening an investigation into whether Microsoft structured the deal with Inflection AI to avoid a government antitrust review of the transaction.

UK Wants to Know If Microsoft Is Trying to Stifle Competition With AI Hires

UK regulators have launched a formal antitrust investigation into Microsoft over its hiring of executives from Inflection AI, a Palo Alto startup that's creating its own ChatGPT rival, dubbed Pi. In March, Microsoft poached two of Inflection's co-founders, Mustafa Suleyman and Karén Simonyan, to help lead a new division at Redmond called Microsoft AI. Several Inflection staffers also jumped ship and joined Microsoft. Inflection said it would continue on under a new CEO while hosting the lab's AI models via Microsoft's Azure cloud service. The news prompted the UK's Competition and Markets Authority (CMA) to launch a preliminary investigation in April to determine whether the move could undermine competition in the UK. "Though these partnerships have the potential to bring pro-competitive benefits, the CMA remains vigilant against the possibility that incumbent technology firms could use partnerships and investments to shield themselves from competition," the CMA said at the time. The agency then invited the public to comment on Microsoft's hiring of the Inflection AI staffers and its partnership with French AI startup Mistral, as well as Amazon's investment in Anthropic. On Tuesday, the CMA formally launched a "merger inquiry" into the hirings, which will culminate in the agency deciding whether to continue a second-phase probe by a Sept. 11 deadline. The investigation could be long if the CMA finds that Microsoft's hiring of the Inflection AI staffers risks lessening competition in the market. UK regulators could try to negotiate with Microsoft to remedy the issue or impose a stiff penalty if the company refuses to comply. Microsoft didn't immediately respond to a request for comment. In the meantime, the CMA has also launched an antitrust probe into the company's billion-dollar relationship with ChatGPT developer OpenAI.

Microsoft's hire of start-up staff probed as possible merger

Microsoft is being investigated in the UK over whether it has effectively merged with an artificial intelligence (AI) start-up firm by hiring its staff. Key employees at Inflection AI left the company in March to join the tech giant, with co-founder Mustafa Suleyman becoming head of its new AI division. The Competition and Markets Authority (CMA) said it would investigate whether this constituted a merger, and if so, whether it could lessen competition. "We are confident that the hiring of talent promotes competition and should not be treated as a merger," a Microsoft spokesperson told the BBC. The CMA also said Microsoft had entered into a "non-exclusive licensing deal" to use the company's AI models. The initial probe, also referred to as a phase one inquiry, comes after the CMA called for views on Microsoft's hiring of Inflection staff in April. Mr Suleyman previously said in a post on X he was "excited" to take up his new position at Microsoft - and would be taking several Inflection colleagues with him. This included the company's chief scientist and Mr Suleyman's "friend and long time collaborator" Karén Simonyan. If the CMA finds that there is enough evidence to suggest there has been a "merger" between Microsoft and Inflection that could lessen competition, it will progress to a more in-depth investigation. It says it will make a decision on whether the transaction should be cleared or investigated further by 11 September.

UK antitrust watchdog launches probe into Microsoft's Inflection AI partnership - SiliconANGLE

UK antitrust watchdog launches probe into Microsoft's Inflection AI partnership The UK's antitrust watchdog has launched a review of a partnership that Microsoft Corp. inked with Inflection AI Inc,. a heavily-funded OpenAI rival, earlier this year. The Competition and Markets Authority, or CMA, announced the move today. The development comes about three months after CMA officials began looking into Microsoft's deal with Inflection AI. On April 24, the regulator invited members of the public to provide input on the partnership's potential market impact. Inflection AI was founded in 2022 and closed a $1.3 billion funding round the following year that included contributions from Microsoft. It developed a large language model, Inflection-2.5, that can generate text, craft code and perform related tasks. The startup said at the time of the algorithm's debut that it can nearly match the capabilities of GPT-4, the predecessor to OpenAI's latest GPT-4o LLM. In March, Microsoft appointed Inflection AI co-founder and Chief Executive Officer Mustafa Suleyman to the helm of its Microsoft AI machine learning group. It also hired most of the LLM's other staffers and entered a nonexclusive agreement to license Inflection-2.5. Inflection AI, for its part, announced plans to refocus on developing custom LLMs for enterprises. The CMA detailed today that its probe into the deal has two main focus areas. Officials plan to evaluate the manner in which Microsoft hired most of Inflection AI's workforce, as well as examine the "related arrangements" it inked with the LLM developer as part of the partnership. The CMA didn't specify what arrangements it will scrutinize. In March, sources told The Information that the partnership cost Microsoft $650 million. The company reportedly paid the bulk of that sum, $620 million, for a nonexclusive license to Inflection AI's technology. The remaining $30 million was provided as part of an agreement in which Inflection AI committed not to sue Microsoft for hiring its former employees. The CMA's initial priority is to determine whether the partnership amounts to a so-called relevant merger situation. This term covers not only acquisitions, but also other deals such as partnerships in which the companies involved "cease to be distinct." If the CMA finds that Microsoft's Inflection AI agreement meets the relevant criteria, it will seek to determine whether the deal may substantially reduce market competition in the UK. Depending on the review's findings, the matter could be referred to a more in-depth Phase 2 investigation. Such probes can lead the CMA to issue fines or order the companies being scrutinized to change some of their business practices. Microsoft said in a statement that "we are confident that the hiring of talent promotes competition and should not be treated as a merger. We will provide the UK CMA with the information it needs to complete its inquiries expeditiously."

Microsoft Faces U.K. Antitrust Probe Over Inflection AI Ties -- Update

U.K. antitrust officials are weighing whether Microsoft's partnership with Inflection AI and the hiring of former employees pose a threat to competition, the latest probe into the tech giant's ties with artificial-intelligence startups. Earlier this year, Microsoft hired Inflection AI's co-founder and almost all of its employees and agreed to pay the startup around $650 million as part of a licensing fee to resell its technology. The Competition and Markets Authority said it was considering whether Microsoft's ties with Inflection AI should be considered a de facto merger that might stifle competition in the U.K., with an initial decision due by Sept. 11. "We are confident that the hiring of talent promotes?competition and should? not be treated as a merger," a Microsoft spokesperson said. "?We will provide the U.K. Competition and Markets Authority with the information it needs to complete its enquiries expeditiously." The U.K. probe follows the Federal Trade Commission opening an investigation into whether Microsoft structured the deal with Inflection AI to avoid a government antitrust review of the transaction.

Microsoft Faces Investigation by UK Regulators Over Ties to Inflection AI -- Here's Why

U.K. regulators are opening an investigation into Microsoft's (MSFT) hiring of former Inflection AI employees and related agreements with the artificial intelligence (AI) start-up. The Competition and Markets Authority (CMA) said Tuesday it is examining how the moves by Microsoft could affect competition in the AI market and whether they effectively created a merger. Microsoft reportedly paid $650 million to license Inflection's technology earlier this year, as well as hired senior members of the Inflection team, drawing scrutiny of the agreement amid concerns it could violate antitrust rules for mergers and acquisitions (M&A). The company announced that it hired Inflection co-founder Mustafa Suleyman and Inflection Chief Scientist Karén Simonyan to join its AI unit in March. Microsoft presented this as a hiring decision to build its AI unit, rather than an acquisition scenario. The tech giant reported that "several members of the Inflection team have chosen to join Mustafa and Karén at Microsoft," including "some of the most accomplished AI engineers, researchers, and builders in the world." Inflection said the Microsoft hiring was an "important change," and announced during this time that its Inflection-2.5 AI model would be hosted on Microsoft Azure. The CMA is the latest regulator to announce an investigation into the relationship between Microsoft and Inflection. The Federal Trade Commission (FTC) is also reportedly investigating Microsoft's actions with Inflection AI to determine if they violated antitrust rules for M&A. Microsoft shares were little changed in early trading on Tuesday. The stock has gained nearly over 19% since the start of the year.

Microsoft faces UK antitrust investigation over hiring of Inflection AI staff

UK regulators are now formally investigating Microsoft's hiring of Inflection AI staff, months after most of Inflection's staff joined Microsoft's new AI division. The UK's Competition and Markets Authority (CMA) is now opening up a phase one merger investigation into the partnership, with a September 11th deadline over whether the investigation will progress into a second phase. If the case progresses to the phase two stage then it could present a stumbling block for Microsoft's AI ambitions. The CMA last signaled a more in-depth review of Microsoft's $68.7 billion acquisition of Activision Blizzard in 2022, eventually forcing the company to restructure its deal and give up key cloud gaming rights in the UK and many other markets worldwide. It's still early days for the CMA's Inflection AI investigation, but the results could have an impact far beyond just the UK.

UK launches competition probe into Microsoft and Inflection AI

Earlier this year, the software giant hired former Inflection and DeepMind scientist Jordan Hoffman to lead its new AI hub in London. The UK is investigating whether Microsoft hiring former employees of Inflection AI and other deal between the two parties has implications relevant to a merger situation. According to the Competition and Markets Authority (CMA), the merger inquiry will assess whether the creation of that situation has led or may lead to a "substantial lessening of competition" within the UK market. Microsoft, which has been pumping billions into AI development, hired former Inflection and DeepMind scientist Jordan Hoffman to lead a new AI hub in London. Mustafa Suleyman, the Google DeepMind co-founder who was hired by Microsoft to head its overall AI business, said the London hub will drive advancements in language models, create tools for foundation models and collaborate with AI teams across Microsoft and its partners - including OpenAI. "There is an enormous pool of AI talent and expertise in the UK, and Microsoft AI plans to make a significant, long-term investment in the region as we begin hiring the best AI scientists and engineers into this new AI hub," Suleyman wrote, describing Hoffman as an "exceptional" AI scientist and engineer. "In the coming weeks and months, we will be posting job openings and actively hiring exceptional individuals who want to work on the most interesting and challenging AI questions of our time. We're looking for new team members who are driven by impact at scale, and who are passionate innovators eager to contribute to a team culture where continuous learning is the norm." Before joining Microsoft, Hoffman worked at Inflection, the AI start-up founded in 2022 that is taking on the likes of OpenAI and Google. He was also Suleyman's colleague at DeepMind based in London. The latest CMA merger inquiry comes after a brief period of invitation to comment on the matter between April and May. During this period, the CMA wanted interested third parties to give their views on whether the partnerships between Microsoft and Mistral AI, Amazon and Anthropic, as well as Microsoft's hiring of former employees and related arrangements with Inflection AI, fall within UK merger rules and the "impact that these arrangements could have" on competition in the UK. The deadline for a phase 1 decision following the investigation is 11 September this year. "Foundation models have the potential to fundamentally impact the way we all live and work, including products and services across so many UK sectors - healthcare, energy, transport, finance and more," CMA executive director of mergers Joel Bamford said at the time. "So open, fair, and effective competition in foundation model markets is critical to making sure the full benefits of this transformation are realised by people and businesses in the UK, as well as our wider economy where technology has a huge role to play in growth and productivity." Last November, Microsoft made its largest-ever investment in the UK with a commitment of £2.5bn over the next three years to expand its AI data centre footprint in the country and foster research in the technology. Find out how emerging tech trends are transforming tomorrow with our new podcast, Future Human: The Series. Listen now on Spotify, on Apple or wherever you get your podcasts.

Microsoft Faces U.K. Antitrust Probe Over Inflection AI Ties -- 2nd Update

U.K. antitrust officials are weighing whether Microsoft's partnership with Inflection AI and the hiring of former employees pose a threat to competition, the latest probe into the tech giant's ties with artificial-intelligence startups amid heightened scrutiny on both sides of the Atlantic. Microsoft earlier this year hired Inflection AI's co-founder and almost all of its employees and agreed to pay the startup around $650 million as part of a licensing fee to resell its technology. The Wall Street Journal reported last month that the Federal Trade Commission is investigating whether Microsoft structured the deal to avoid a government antitrust review of the transaction. The U.K's Competition and Markets Authority is now launching a probe of its own to determine whether Microsoft's ties with Inflection AI should be considered a de facto merger that might stifle competition in the U.K. An initial decision is due by Sept. 11. "We are confident that the hiring of talent promotes? competition and should? not be treated as a merger," a Microsoft spokesperson said. "?We will provide the U.K. Competition and Markets Authority with the information it needs to complete its enquiries expeditiously." The U.K. investigation underscores the growing pressure on both sides of the Atlantic that tech giants face to justify their arrangements with AI startups. Microsoft is already under scrutiny in Britain, where officials are looking at whether its partnership with ChatGPT maker OpenAI should be considered a de facto merger. Earlier this year, the Federal Trade Commission launched an inquiry into generative AI partnerships, ordering companies like Microsoft to provide information regarding recent investments into startups. The FTC is also seeking information about how and why Microsoft and Inflection AI negotiated their partnership, the Journal reported. Closer scrutiny has already forced Microsoft to loosen the strings on some arrangements. Last week, the group relinquished its seat as an observer on OpenAI's board after Microsoft realized its position had unsettled some antitrust officials and opted to abandon it rather than defend a role it no longer needed, a person familiar with the decision said. News Corp, owner of Dow Jones Newswires and The Wall Street Journal, has a content-licensing partnership with OpenAI.

UK antitrust officials join FTC in investigating Microsoft's hiring of Inflection AI staff

The CMA will look into whether Microsoft was trying to avoid merger scrutiny. The UK's antitrust watchdog is once again investigating . The Competition and Markets Authority () has over the company's hiring of former Inflection AI staff and its licensing of the startup's tech. The initial phase one investigation will be wrapped up by September 11, at which point the CMA will determine whether to open a more in-depth (phase two) probe. The agency will try to determine whether Microsoft attempted to avoid antitrust scrutiny by recruiting Inflection's staff and employing its tech but not buying the company outright. It will look at whether the moves "resulted in the creation of a relevant merger situation under the merger provisions of the Enterprise Act 2002" and if that has, or is likely to have, a negative impact on competition in the UK. "We are confident that the hiring of talent promotes competition and should not be treated as a merger," Microsoft told in a statement. "We will provide the UK CMA with the information it needs to complete its inquiries expeditiously." Microsoft's Inflection strategy is also under the spotlight in the US. The Federal Trade Commission is . Microsoft last week its non-voting observer seat on OpenAI's board in what onlookers believed was an attempt to evade further antitrust scrutiny. Microsoft has invested into OpenAI -- which has also . Meanwhile, the CMA and Microsoft are familiar foes. The antitrust agency heavily scrutinized Microsoft's $69 billion takeover of Activision Blizzard. The probe was the before .

Microsoft hiring of AI startup's founder and key employees under scanner: What makes governments worried - Times of India

Microsoft Corp's investment in Inflection AI is facing a full-blown antitrust investigation in the UK, according to Bloomberg, with regulators scrutinizing the hiring of a significant number of the startup's employees, reports Bloomberg. Microsoft hired Mustafa Suleyman as well as Inflection's Chief Scientist and co-founder Karén Simonyan, along with most of the startup's employees earlier this year. The Competition and Markets Authority (CMA) has announced the launch of a formal phase one merger probe into the partnership. The agency has a deadline of September 11 to decide whether to escalate the investigation to a more in-depth phase, Bloomberg reports. What makes governments worried about AI mergers This move by the CMA comes amidst concerns that big tech companies are strategically investing in AI startups to stifle competition, according to Bloomberg. The agency has observed a pattern of large tech firms acquiring or investing in AI startups, potentially to control and influence the development of this nascent field. The CMA has previously used its merger control powers to assess similar deals, but in the case of Microsoft's investment in Mistral AI, the agency determined Microsoft did not gain enough control to influence Mistral's commercial activities, reports Bloomberg. The Microsoft-Inflection deal, however, appears to be structured differently. While Microsoft did pay Inflection $650 million, primarily to license its AI software, the key aspect was the hiring of a substantial portion of the startup's staff, according to a source familiar with the arrangement, as reported by Bloomberg. Governments in some countries are said to have become concerned about how the biggest technology companies are gobbling up the talent and products of innovative AI startups without formally acquiring them. According to a report by news agency AP, three members of the US Senate recently wrote to antitrust enforcers at the Justice Department and the Federal Trade Commission (FTC), urging them to investigate Amazon's deal with San Francisco-based Adept. The deal will result in Adept's CEO and key employees going to Amazon and giving the e-commerce giant a license to Adept's AI systems and datasets. What Microsoft said on the hiring Microsoft maintains that "hiring talent promotes competition and should not be treated as a merger," and is prepared to cooperate with the CMA's investigation, reports Bloomberg. This isn't an isolated incident. The report said that Amazon.com has also been actively recruiting talent from AI startups, including key executives and employees from Adept AI Labs. In a separate move seen as an attempt to avoid regulatory scrutiny, Microsoft recently abandoned plans to take board roles at OpenAI. Regulators in both the US and Europe had expressed concerns about Microsoft's potential influence over OpenAI. The CMA is yet to decide on whether to launch a probe into the OpenAI investment. The TOI Tech Desk is a dedicated team of journalists committed to delivering the latest and most relevant news from the world of technology to readers of The Times of India. TOI Tech Desk's news coverage spans a wide spectrum across gadget launches, gadget reviews, trends, in-depth analysis, exclusive reports and breaking stories that impact technology and the digital universe. Be it how-tos or the latest happenings in AI, cybersecurity, personal gadgets, platforms like WhatsApp, Instagram, Facebook and more; TOI Tech Desk brings the news with accuracy and authenticity.

Microsoft can't seem to catch a break from regulators

The tech giant paid artificial intelligence firm Inflection a $650 million "licensing fee" to use its AI models and hire most of its employees, including its chief executive Mustafa Suleyman, back in March. In the U.S., the Federal Trade Commission has reportedly already been investigating whether Microsoft sought to dodge regulatory scrutiny by poaching Inflection staffers and paying the fee rather than buying the company outright. While any merger valued at more than $119 million has to be reported to federal antitrust enforcement agencies, the FTC is examining whether Microsoft's deal with Inflection AI was structured to avoid antitrust safeguards. Read more: Big AI is finally on the antitrust hot seat. Here's what that means On Tuesday, the Competition and Markets Authority -- the primary competition and consumer regulatory agency in the UK -- said it was probing the deal, too. The agency said it had "sufficient information" related to Microsoft's hiring of Inflection employees and its agreement with the AI company to launch an investigation into whether the deal is anti-competitive. A decision will be made on whether to move forward with further investigation by Sept. 11. Tech giants have fallen under the microscope for anti-competitive behavior, particularly with the rise of AI fueling competition -- and mergers. In the first half of 2024, tech sector deals in the U.S. totaled $186 billion, the largest of any industry, according to consulting firm EY. Apart from Microsoft's strange deal with Inflection, Amazon has poured $4 billion into AI startup Anthropic to use its tech, and Apple purchased Canadian startup DarwinAI earlier this year, adding to its string of quiet AI acquisitions. As a result, the Department of Justice together with the FTC have reportedly reached a deal to investigate Microsoft, Nvidia, and OpenAI over potentially anti-competitive behavior in the AI space, according to The New York Times.