Microsoft's links with OpenAI to be reviewed by competition watchdog

The UK's competition watchdog is to review whether Microsoft's partnership with OpenAI could be considered as a merger.

The Competition and Markets Authority is examining whether Microsoft's work with the artificial intelligence firm could affect the AI market overall.

Microsoft is OpenAI's biggest investor and has pledged to invest billions.

Responding to the review, Microsoft said it had "preserved independence" for both companies.

The Competition and Markets Authority (CMA) is questioning whether the partnership has resulted in an "acquisition of control", whether an effective merger has taken place and if this could impact on competition in the UK.

It has asked third parties for their comments on the tie-up and could launch a probe if it felt it was necessary.

Sorcha O'Carroll, senior director for mergers at the CMA, said: "The invitation to comment is the first part of the CMA's information gathering process and comes in advance of launching any phase 1 investigation, which would only happen once the CMA has received the information it needs from the partnership parties."

In response to the announcement, Microsoft said that its partnership with OpenAI, best known as the creator of ChatGPT, has "fostered more AI innovation and competition".

Vice chair and president of Microsoft Brad Smith said that the only thing that has changed is that it "will now have a non-voting observer on OpenAI's board".

He added that the tech giant, which also came under scrutiny from regulators over its acquisition of Call of Duty Maker Activision Blizzard, will work closely with the CMA to provide all the information that it needs.