Will Microsoft-OpenAI Partnership Face UK Antitrust Challenge? CMA Probes Potential Impact

Microsoft Corp MSFT and OpenAI's partnership is under the U.K.'s Competition and Markets Authority (CMA) scrutiny, which is considering whether to initiate a merger probe into the collaboration. 

This evaluation aims to assess potential competition issues in the UK stemming from their partnership. The CMA's move comes after it approved Microsoft's acquisition of Activision Blizzard.

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As the principal investor in OpenAI, Microsoft has infused $13 billion into the AI startup, Bloomberg reports. 

The collaboration has led to integrating OpenAI's innovations into Microsoft's suite of enterprise tools, while OpenAI heavily relies on Microsoft's cloud services. Despite this close relationship, Microsoft does not exercise control over OpenAI, which is highlighted by recent events at OpenAI.

OpenAI's board ousted CEO Sam Altman in November, causing significant ripples in the tech world. 

This led to a situation where Microsoft CEO Satya Nadella expressed interest in hiring Altman, prompting most of OpenAI's staff to consider moving to Microsoft unless Altman was reinstated, which he eventually was.

OpenAI then set up a three-person interim board to appoint new directors and subsequently announced Microsoft as a nonvoting observer on its board. Microsoft's president, Brad Smith, stressed that their partnership promotes AI innovation and competition, maintaining independence between the two companies. 

Also Read: Battle in the Clouds: How Amazon and Google's Allegations Might Reshape Microsoft's Strategy

Price Action: MSFT shares are down 0.27% at $370.10 premarket on the last check Friday.