UK Regulator Declines To Investigate Microsoft’s Mistral AI Deal

The United Kingdom’s competition regulator has declined to investigate Microsoft’s partnership with French AI startup, Mistral AI.

A few weeks ago the UK’s Competition and Markets Authority (CMA) had invited interested third parties, to comment on the partnerships between Microsoft and Mistral AI, as well as Amazon and Anthropic.

But now the CMA announced that it has decided that “Microsoft Corporation’s partnership with Mistral AI does not qualify for investigation under the merger provisions of the Enterprise Act 2002.”

Microsoft-Mistral

In February this year Microsoft had signed “a multi-year partnership” with Paris-based Mistral AI, prompting regulatory concerns in Europe.

Mistral’s deal with Microsoft led questions about Mistral AI’s motivations, because during discussions about the EU’s wide-sweeping AI Act, the French start-up had reportedly lobbied for exemptions for some AI systems, warning that overly strict laws would hamper European start-ups’ chances of competing with US-based giants.

Microsoft’s partnership with Mistral AI was in addition its $13 billion investment in San Francisco-based OpenAI, which the CMA is already probing for antitrust violations.

Microsoft however invested significantly less money in Mistral AI compared to OpenAI.

Indeed, Redmond’s 15-million euro ($16 million) multi-year partnership investment in Mistral AI will make the company’s AI models available via Microsoft’s Azure cloud computing platform.

That small funding from Microsoft will convert into an equity stake in Mistral AI’s next funding round.

Regulatory interest

There is increasingly regulatory scrutiny of the AI sector.

In January 2024, the European Commission said it was investigating whether Microsoft’s investments into OpenAI may fall under EU merger rules.

The UK’s CMA meanwhile in 2023 had begun 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 in April the CMA announced it had “real concerns” with AI Foundation Models (FMs) that are controlled by a small number of tech firms.

Now the UK’s CMA has concluded that Microsoft’s partnership with Mistral AI does not qualify for further investigation.