Early this year, Microsoft announced the formation of a new organization called Microsoft AI to focus on advancing Copilot and other consumer AI products and research within the company. To lead this organization, Microsoft hired Inflection co-founders Mustafa Suleyman and Karén Simonyan. Along with the co-founders, several members of the Inflection team, including some of the world's most accomplished AI engineers and researchers, also joined Microsoft.
Last month, the US Federal Trade Commission (FTC) initiated a probe to determine whether Microsoft's deal with Inflection AI violated US antitrust laws. The FTC is investigating whether Microsoft hired key employees from Inflection AI to avoid antitrust scrutiny that could have resulted from a complete acquisition.
Today, the UK's Competition and Markets Authority (CMA) launched a similar investigation into Microsoft's deal with Inflection.
The 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 and, if so, whether the creation of that situation 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.
In April, the CMA invited interested third parties to comment on whether the deals between Microsoft and Mistral AI, Microsoft's hiring of former employees and related arrangements with Inflection AI fall within UK merger rules. The CMA also sought views on the potential impact of these arrangements on competition in the UK.
The investigations by both the FTC and CMA highlight growing concerns regarding the potential for big tech companies to stifle competition through strategic acquisitions and talent recruitment. The outcomes of these probes could have significant implications for future deals within the AI industry, setting a precedent for how regulators approach such arrangements.
Source: CMA
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