Disguised merger? The British competition authority is closely interested in the partnership between Microsoft and OpenAI (ChatGPT)

Has OpenAI quietly fallen into Microsoft’s hands? This is what the British competition authority will have to determine.

Can Microsoft’s entry into the capital of OpenAI be considered as a merger between the two entities or as an absorption of the company led by Sam Altman by the IT and digital giant? The Competition and Markets Authority (CMA), the British competition authority, will ask itself the question.

Is OpenAI truly independent?

Microsoft has invested billions of dollars to accelerate the development of OpenAI, at the same time taking a stake in the company. Currently, she owns 49% of the shares of the firm behind ChatGPT and DALL-E. She does not acquire more for “preserve independence” of the two players, but the regulator across the Channel believes that it could only be a facade.

The very close partnership between Microsoft and OpenAI raises questions. The first based most of its strategy linked to machine learning and generative AI functions on the second. It also integrates a number of functions linked to GPT-4, the language model developed by Open AI, in its products: Windows, Office suite, Bing, etc.

The case of the ouster of Sam Altman also alerted the CMA. Microsoft had offered to hire him and a good part of its teams, before he finally returned to OpenAI. But the Redmond firm still emerged a winner from this situation since Microsoft gained a place on the new board of directors.

A potential upcoming investigation

Satya Nadella, head of Microsoft, had already sowed doubt about Microsoft’s influence on OpenAI by declaring that the company would have to change its governance to be able to continue to grow.

The CMA wants to shed light on the real relationship between the two entities and asks them to provide evidence that no acquisition of control has taken place. Third-party industry players are also invited to give their opinion on this issue.

We are at the first stage of the procedure. If the CMA is not convinced by the answers given by Microsoft and OpenAI, it could launch a formal investigation to determine whether the merger of the two companies could pose a risk to competition in the United Kingdom.

Source : BBC