Key Takeaways
- The U.K.’s Competition and Markets Authority said Wednesday it determined Microsoft’s partnership with Inflection AI does not threaten competition.
- The CMA had opened an investigation into the partnership to examine the impact on competition and if the agreement between the companies constituted a merger.
- The investigation’s closure could be a positive indicator for big tech companies’ AI partnerships as regulators examine their impact on competition.
- Microsoft’s partnership with Inflection AI is also reportedly under investigation by U.S. regulators.
The U.K.’s Competition and Markets Authority (CMA) said Wednesday it determined Microsoft’s (MSFT) hiring of former Inflection AI employees and related agreements with the AI startup do not pose a threat to competition.
The CMA had opened an investigation into the partnership to examine its impact on competition in the AI market and whether it effectively created a merger after Microsoft reportedly paid $650 million to license Inflection’s tech and hired senior members of the Inflection team.
The antitrust regulator said that while it found the transaction could be considered a “relevant merger situation,” that it “does not give rise to a realistic prospect of a substantial lessening of competition.”
The investigation’s closure could be good news for big tech companies amid regulatory scrutiny with a particular focus on AI partnerships.
Microsoft’s partnership with Inflection AI is also reportedly under investigation in the U.S., with the Federal Trade Commission (FTC) examining possible violations of antitrust rules for mergers and acquisitions (M&A).
Microsoft shares were little changed in intraday trading Wednesday following the news, and have gained about 9% from the start of the year.