The British regulator has reported that it will analyze Microsoft’s partnership with the startup OpenAI to determine any potential negative impact on market competition due to the tech giant’s relationship with one of the most important AI companies today.
The Competition and Markets Authority (CMA) stated in a press release that it is checking whether Microsoft’s $10 billion investment in OpenAI has led to a ‘relevant merger situation, in which two or more companies have ceased or will cease to be distinct as a result of the transaction.’ This means there are suspicions that the partnership has de facto resulted in Microsoft’s takeover of control over OpenAI.
The CMA noted that the pace at which artificial intelligence is scaling is ‘unprecedented in economic history,’ and that advancements in so-called foundational models, which describe general-purpose AI tools like ChatGPT, represent a ‘critical moment in the development of this transformative technology.’
The regulator stated that it will reassess whether Microsoft’s partnership with OpenAI has resulted in the acquisition of control – in other words, a situation where one company has material influence, i.e., control or more than 50 percent of the voting rights over another entity.
OpenAI CEO Sam Altman stated on November 29 that Microsoft will have observer status on the board, meaning it will have access to confidential information but will not have voting rights.
Microsoft denied on Friday that it has taken control over OpenAI.
– The only change is Microsoft’s observer status on the OpenAI board, without voting rights, which is significantly different from, for example, Google’s acquisition of DeepMind in the UK. We will closely cooperate with the CMA to provide all necessary information, – stated Microsoft President Brad Smith.
At the end of November, the OpenAI board abruptly removed Altman from the CEO position, claiming he had lost their trust.
In explaining the dismissal, board members only stated that he had not been ‘always honest in communication,’ which made it difficult for them to perform their duties. They did not specify in what he was allegedly not honest.
Just a few days later, the startup reported that Altman was returning to the CEO position, and they announced changes to the board that had removed him and the appointment of new members, former U.S. Treasury Secretary Larry Summers and former Salesforce chief Bret Taylor.
Altman’s return to the CEO position could signify a new chapter in the development of the nonprofit startup that has long tried to balance between fears of potential threats from artificial intelligence and its potential for commercialization, Reuters notes.
It seems that the changes in the board of directors are favorable to Altman and Microsoft, which financially supports him and is already offering OpenAI’s technology to business users around the world, the agency added.
