CMA and possibly FTC are investigating Microsoft’s billion-dollar investment in OpenAI
The British regulator Competition and Markets Authority and reportedly also the US Federal Trade Commission are conducting an exploratory investigation into Microsoft’s billion-dollar investment in OpenAI. The investigation comes after the sudden departure and return of OpenAI founder Sam Altman.
The British CMA let know that it is reviewing whether Microsoft’s $13 billion investment in OpenAI, combined with “recent developments,” has led to “a governance takeover.” According to the regulator, this is the case when Microsoft has major influence over OpenAI, de facto controls the latter or has more than 50 percent of the voting rights. If it turns out that a ‘takeover situation’ has indeed arisen, the CMA will further investigate whether this will jeopardize competition in the UK. The regulator is now first inviting stakeholders to comment before the agency determines early next year whether to initiate a formal investigation.
Although it is not mentioned what these ‘recent developments’ refer to, it probably concerns the situation with Sam Altman. OpenAI’s old board decided to fire the CEO a month ago. Altman then looked set to lead a research department at Microsoft, but after many of the employees protested the firing, Altman returned to OpenAI and the board resigned. A few weeks later, Microsoft was given a seat on OpenAI’s board of directors, although it is not allowed to vote on it.
In a comment says Microsoft chairman Brad Smith that the partnership with OpenAI has fostered greater innovation and competition in the AI market, while maintaining the independence of both companies. According to Smith, Microsoft’s “observant” position on OpenAI’s board is “very different from an acquisition like Google’s purchase of DeepMind.” He says he will work closely with the CMA and provide the regulator with all necessary information.
The US FTC has not yet officially announced that it is investigating Microsoft’s investment in OpenAI, but Bloomberg claims so based on information from an anonymous insider. Although no formal investigation has yet been launched, the regulator is said to be already exploring whether the investment violates antitrust laws. The FTC declined to comment, the news agency said.