Back in March, Inflection, an AI startup announced that much of its team and two of its founders, including Mustafa Suleyman had been recruited by Microsoft as part of a deal that also saw Microsoft Azure host Inflection's large language model which powers its Pi AI service. The UK's Competition and Markets Authority (CMA) got a bit suspicious and investigated but today has said the deal is fine to go ahead.
In a document (PDF) it published, the CMA said that it considered evidence from Microsoft, Inflection, and other market participants and decided that the move wasn't anti-competitive. It said that Inflection's existing products don't seem to be a major competitive threat to Microsoft and other players in the market.
For those who haven't heard of Inflection, it's an AI startup that has created an EQ-first chatbot. Instead of trying to be super intelligent (it's still pretty clever), it tries to be emotionally intelligent, primarily. In the CMA's view, Inflection doesn't hold much market share in the UK, so that worked in Microsoft's favor when it came to this decision.
The evidence that the CMA took in from Inflection's competitors also said that while emotional intelligence is innovative, they believe it is replicable and not a major threat to them.
In August, Inflection revealed plans to put a cap on interactions with its personal bot so that it can use its computing resources to target paying enterprise customers. Microsoft's deal could be seen to be anti-competitive here but the CMA said it's not a big enough issue to stop the deal because Inflection is still in the early stages of getting services ready for enterprise.
As mentioned in the article Neowin published in August (linked above), the main people hurt by this deal are those who regularly use Inflection's Pi chatbot due to the restrictions that are coming into force on it. That, however, hasn't anything to do with competition and not a basis for the CMA to stop the deal.
Source: CMA
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