UK CMA Seeks Feedback On Microsoft, Amazon AI Partnerships

The UK competition regulator continues to expand its investigation into the artificial intelligence (AI) sector and its key players.

The Competition and Markets Authority (CMA) extended on Wednesday an invitation to interested third parties, to comment on the partnerships between Microsoft and Mistral AI, as well as Amazon and Anthropic.

Comments and feedback are also being sought over Microsoft’s hiring of former employees and related arrangements with Inflection AI.

Feedback wanted

Last year the CMA confirmed it was investigating Foundation Models (FMs), as the market continues to develop at a “whirlwind pace”.

That investigation last September identified risks associated with AI FMs, and proposed seven guiding principles for the foundation models that underpin AI systems.

Then earlier this month the CMA announced it has “real concerns” with AI Foundation Models (FMs) that are controlled by a small number of tech firms.

The CMA said at the time that it had identified an “interconnected web of over 90 partnerships and strategic investments involving the same firms: Google, Apple, Microsoft, Meta, Amazon, and Nvidia (the leading supplier of AI accelerator chips).”

Now the CMA is seeking feedback about a number of AI partnerships and arrangements, although it said it has not formed any conclusions on whether the deals fall within UK merger rules or raise competition concerns in the UK.

Specifically the CMA said today that it has opened invitations to comment (ITCs) for interested third parties to give their views on whether the partnerships between Microsoft and Mistral AI, and Amazon and Anthropic, as well as Microsoft’s hiring of former employees and related arrangements with Inflection AI, fall within UK merger rules and the impact that these arrangements could have on competition in the UK.

Microsoft recently made headlines earlier this month when it announced that it is to open a London hub for its new consumer artificial intelligence (AI) division headed by Jordan Hoffmann, who joined the company from start-up Inflection AI last month.

At the time Microsoft hired most of Inflection’s staff, including chief executive Mustafa Suleyman, who now heads Microsoft’s consumer AI division.

The company reportedly paid $650 million (£514m) to Inflection as part of the mass hiring deal, which effectively turned Inflection into a much smaller company with a less ambitious business model.

OpenAI, in which Microsoft is a major investor, opened its first overseas office in London last year. Suleyman has said the new office would “collaborate closely” with OpenAI.

CMA ITC

The CMA’s ITCs, which are the first part of the information gathering process for the British competition regulator, and come in advance of the launch of formal Phase 1 reviews.

An ITC does not start the formal Phase 1 review, nor does it necessarily mean the CMA has jurisdiction.

The CMA is now inviting views by Thursday 9 May on whether the partnerships and other arrangements between Microsoft and Inflection AI, Amazon and Anthropic, and Microsoft and Mistral AI result in the creation of relevant merger situations and, if so, the impact of these deals on competition in the UK.

“Today we’re inviting comments into the partnerships between Microsoft and Mistral AI, Amazon and Anthropic, and Microsoft’s hiring of former employees and related arrangements with Inflection AI,” said Joel Bamford, Executive Director of Mergers at the CMA.

“We will assess, objectively and impartially, whether each of these 3 deals fall within UK merger rules and, if they do, whether they have any impact on competition in the UK,” said Bamford.

Bamford added that foundation Models have the potential to fundamentally impact the way we all live and work. So open, fair, and effective competition in Foundation Model markets is critical to making sure the full benefits of this transformation are realised by people and businesses in the UK, as well as our wider economy where technology has a huge role to play in growth and productivity.

“Given the global nature of these markets, competition authorities around the world are actively looking into AI,” Bamford said.

“The CMA recently committed to step up the use of its merger control powers as part of its recent Foundation Models update,” Bamford concluded. “While we remain open minded, and haven’t drawn any conclusions, our aim is to better understand the complex partnerships and arrangements at play.”

The CMA is also considering feedback received earlier this year on Microsoft’s partnership with OpenAI and is currently waiting for information it has requested from the firms.

Last week European antitrust regulators were reportedly not going to pursue a formal investigation into Microsoft’s huge investment in OpenAI.