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The UK competition authority has officially launched an investigation into Microsoft's hiring of staff from start-up Inflection AI, as investments by technology firms world wide come under increasing scrutiny.
The Competition and Markets Authority said on Tuesday that the corporate has “sufficient information” related to Microsoft’s hiring of “certain former Inflection AI employees” and the conclusion of related agreements with Inflection to initiate an investigation.
The move to launch a proper merger investigation got here after the regulator asked for comments on the Microsoft-Inflection merger in April, as a part of broader concerns about deal-making within the rapidly evolving AI industry.
The CMA said September 11 was the deadline to expand its investigation to the subsequent level.
Microsoft expressed confidence that attracting talent would promote competition and that the Inflection deal shouldn’t be treated as a merger.
The technology group added that it would supply the CMA with “the data it needs to finish its investigations expeditiously.”
Microsoft participated in Inflection's $1.3 billion funding round last yr and paid $650 million in March to rent the startup's chief executive, Mustafa Suleyman, co-founder of Google's DeepMind, and a number of other other team members and license its technology.
Inflection was founded in 2022 as a consumer AI company with a chatbot product called Pi. Since March, it has focused on selling enterprise AI software to firms after most of its employees moved to Microsoft.
The move caught the eye of regulators and legal experts on the grounds that it was just like a takeover by Microsoft but was not subject to formal takeover rules.
The CMA said in April it was in search of views on whether Microsoft and Amazon's partnerships with AI start-ups, including Microsoft's take care of Inflection, “fall throughout the scope of UK merger rules”.
Microsoft and Inflection emphasized on the time that the agreement was not an acquisition and that Inflection would remain an independent company.
The merger is much from the one AI deal between major technology firms that has attracted the eye of regulators within the US, EU and UK.
Microsoft this month gave up its observer seat on OpenAI's board, while Apple said it might not take the same position amid increasing attention from global regulators to take a position in AI startups.
The European Commission said in June that it was examining the opportunity of an antitrust investigation into the merger between Microsoft and OpenAI, after announcing that it might not conduct an investigation under merger control rules.
The Federal Trade Commission within the US has also begun to take a more in-depth take a look at investments by major technology firms comparable to Microsoft, Amazon and Google in start-ups in the sector of generative AI.
