The UK’s Competition and Markets Authority (CMA) began looking into Microsoft’s partnership with ChatGPT maker OpenAI, while Bloomberg reported the US Federal Trade Commission (FTC) commenced a similar preliminary inquiry.

In a statement, the CMA explained it is providing an early opportunity for companies to comment on Microsoft and OpenAI’s partnership.

It cited a focus on “recent developments” and an eagerness to assess if a merger situation had been created, and what impact that could have on competition in the UK.

The CMA’s information gathering process precedes any formal phase 1 investigation.

It stated it would review whether the partnership between OpenAI and Microsoft has resulted in an acquisition of control, a situation resulting “in one party having material influence or de facto control of more than 50 per cent of the voting rights over another entity”.

The regulator also plans to explore if there has been a “change in the nature of control by one entity over another”.

It highlighted the speed at which AI is scaling and the importance of foundation models, adding it is closely monitoring the impact of partnerships and strategic agreements which could result in the weakening of competition in the development or use of these.

US scrutiny
Bloomberg reported the FTC is also examining the nature of Microsoft’s relationship with OpenAI, making preliminary inquiries to assess if there is any violation of antitrust laws.

In citing recent developments, the CMA is referring to controversy at OpenAI last month when the company’s board removed Sam Altman as CEO, who subsequently accepted a role at Microsoft before returning to the company under a new board.

Microsoft has committed to invest billions in OpenAI.

As part of the shake-up, the software giant was granted a non-voting observer position at the company, with a representative now able to attend OpenAI board meetings and access classified information.