The Competition and Markets Authority (CMA), and reportedly the U.S. Federal Trade Commission (FTC) are both engaged in exploratory inquiries into Microsoft’s billion-dollar investment in OpenAI. This investigation follows the abrupt departure and subsequent return of OpenAI founder Sam Altman.
The CMA in the UK is specifically examining whether Microsoft’s substantial $13 billion investment in OpenAI, coupled with “recent developments,” has resulted in a takeover of the board. A takeover situation, as defined by the regulator, occurs when Microsoft exercises significant influence over OpenAI, effectively controlling more than 50 percent of the voting rights. Should such a takeover be confirmed, the CMA will then assess whether it has anticompetitive implications in the UK. The regulator is currently seeking responses from interested parties before making a decision on whether to initiate a formal investigation at the beginning of the upcoming year.
While the nature of the “recent developments” is not explicitly stated, it is likely connected to the situation involving Sam Altman. The former board of OpenAI dismissed Altman as CEO a month ago. Subsequently, Altman briefly assumed a role in a research department at Microsoft. However, in response to employee protests over Altman’s dismissal, he returned to OpenAI, leading to the resignation of the entire board. Microsoft was later granted a non-voting seat on the OpenAI board a few weeks thereafter.
In response to these developments, Microsoft President Brad Smith emphasized that the partnership between Microsoft and OpenAI has spurred innovation and competition in the AI market, while ensuring the independence of both entities. Smith contends that Microsoft’s position on the OpenAI board, characterized as “observing,” differs significantly from an acquisition, such as Google’s purchase of DeepMind. He expressed readiness to collaborate closely with the CMA, providing all necessary information to the regulator.
Although the FTC has not officially confirmed its investigation into Microsoft’s investment in OpenAI, Bloomberg reports, citing an anonymous insider, suggest that the FTC is already exploring whether the investment potentially violates antitrust laws. The FTC declined to comment on the matter, according to the news agency.
