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.