Breaking News
Get 40% Off 0
🔎 See NVDA's full ProTips for an instant risks or rewards Claim 40% OFF

Microsoft and OpenAI's Collaboration Faces Regulatory Hurdles in the U.K

Published Dec 08, 2023 03:33PM ET Updated Dec 08, 2023 04:01PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. Microsoft and OpenAI's Collaboration Faces Regulatory Hurdles in the U.K
 
MSFT
-0.31%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
ATVI
0.00%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
GOOGL
+0.43%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 

Quiver Quantitative - The United Kingdom's Competition and Markets Authority (CMA) has announced an investigation into the evolving partnership between Microsoft (NASDAQ:MSFT) and OpenAI, the artificial intelligence company behind the renowned ChatGPT. The CMA's inquiry seeks to determine if the collaboration between these two tech entities amounts to a de facto merger, potentially leading to a formal investigation. This regulatory scrutiny comes in the wake of significant changes at OpenAI, including the temporary dismissal and reinstatement of CEO Sam Altman and the formation of a new board featuring notable figures such as Bret Taylor, Larry Summers, and Adam D’Angelo.

Microsoft's substantial investment in OpenAI, totaling $13 billion for a 49% stake in its for-profit arm, has raised questions about the level of influence and control it might exert over OpenAI's operations. The CMA's concern revolves around whether recent governance changes, particularly Microsoft gaining a nonvoting observer position on OpenAI’s board, could impact competition in the AI market. This investigation could lead to significant outcomes, including a potential order for structural or behavioral changes in the relationship between Microsoft and OpenAI.

Market Overview: -CMA is seeking feedback on whether the partnership constitutes a de facto merger. -Microsoft will have a non-voting observer position on OpenAI's board. -An investigation could lead to structural or behavioral changes for the companies.

Key Points: -OpenAI's recent governance changes, including the firing and reinstatement of CEO Sam Altman, prompted CMA's inquiry. -Microsoft invested $13 billion in OpenAI's for-profit arm in 2019. -The CMA's investigation follows similar inquiries from German and EU regulators. -Microsoft maintains the partnership promotes AI innovation and competition. -OpenAI emphasizes its independence and states Microsoft's board role is non-voting.

Looking Ahead: -CMA's decision on whether to launch a formal investigation will depend on public feedback. -Potential remedies could include separation of the companies or limitations on their collaboration. -The investigation adds to growing global scrutiny of big tech's involvement in AI development.

Microsoft has responded to the CMA's concerns, emphasizing that its partnership with OpenAI, which began in 2019, has maintained the independence of both organizations and has been a catalyst for AI innovation and competition. Brad Smith, Microsoft Vice Chair and President, highlighted the distinction between a non-voting board observer and a full acquisition, citing Google's (NASDAQ:GOOGL) purchase of DeepMind as a comparative example. Microsoft has committed to cooperating with the CMA to provide necessary information.

This probe by the U.K. regulator is part of a broader international focus on the Microsoft-OpenAI partnership. The scrutiny from the CMA follows a similar examination by Germany’s Federal Cartel Office, which did not find the partnership subject to its merger-control rules but indicated a willingness to re-examine the situation should Microsoft's influence over OpenAI increase. Additionally, the European Union's antitrust watchdog has been closely monitoring the situation, especially in light of Microsoft's role in OpenAI. The CMA's actions underscore its emerging role as a key global tech regulator, particularly evident in its initial blocking and subsequent approval of Microsoft's acquisition of Activision Blizzard (NASDAQ:ATVI) earlier this year.

This article was originally published on Quiver Quantitative

Microsoft and OpenAI's Collaboration Faces Regulatory Hurdles in the U.K
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.
  • Any comment you publish, together with your investing.com profile, will be public on investing.com and may be indexed and available through third party search engines, such as Google.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email