The British regulator and a media report said that Microsoft’s tie-up with ChatGPT maker OpenAI is under US and UK antitrust scrutiny. Britain’s Competition and Markets Authority (CMA) is seeking feedback on whether Microsoft’s investment in OpenAI should be considered a de facto merger, an initial step that could lead to a formal investigation.
The CMA’s review shows mounting antitrust concerns about the alliance between two tech giants that could stifle innovation and harm consumers, competition lawyers said. They warned that bringing together Microsoft’s computing resources with OpenAI’s AI research and development skills would create a powerful duo that would be able to shut out smaller competitors and potentially sway the industry toward its products.
Microsoft has poured billions into its partnership with nonprofit startups, which have developed autonomous cars, drones, and more. The companies say the alliance aims to speed up the adoption of artificial intelligence. However, rivals fear the alliance will give the companies the resources and power to monopolize the AI space. “This kind of deal has the potential to stifle innovation and limit consumer choice,” competition lawyer Alex Haffner of Fladgate said. “OpenAI is a key part of the wider effort to develop the next generation of technology, but there are legitimate fears that this deal will entrench two dominant players.”
After a dramatic episode last month in which Altman was fired and then rehired by OpenAI, the company resolved its turmoil with a new three-member initial board. It granted Microsoft a non-voting observer position at the company. That position means the company’s representative can attend board meetings and access confidential information but can’t vote on matters including electing or choosing directors.
That move was widely welcomed by employees, who feared a more centralized management structure would have stifled innovation. But some still want to see Altman and co-founder Ilya Sutskever remain at the helm, with the rest of the original leadership team retained.
In a message posted on X, a venture arm of Alphabet’s Google parent company, the co-founders thanked employees for their support. They also vowed to continue pursuing their mission of advancing the field of AI. They thanked the company for allowing them to work with many of their global technology community peers.
A European Union’s antitrust regulator spokesman said it has also been monitoring the situation at OpenAI and that a review is underway to assess whether the deal may impact competition. He said the agency would issue a decision by Jan. 3. Max von Thun, Europe director of the nonprofit Open Markets Institute, which focuses on strengthening antitrust laws, said other regulators could follow suit given the growing concentration in AI. He said it is essential for authorities to investigate such deals quickly, including unwinding them where necessary, to preserve competition and prevent this critical emerging technology from being monopolized.
