UK Competition and Markets Authority’s (CMA), the British competition regulator is investigating the hiring of an ex-employee of Inflection AI by Microsoft and its partnership with the startup.
By 11 September, CMA has to find out whether Microsoft’s hiring of some ex employees of Inflection and its subsequent deal with Inflection has led to bringing about a merger situation under the merger provisions of the Enterprise Act 2002; and whether this would lead to a significant reduction in competition within the UK market.
Microsoft has been entering into deals with several upcoming startups, which has raised eyebrows. In fact, in the past one and a half years, there has been a lot of focus on the way firms in the artificial intelligence (AI) space have been going against competitiveness in trying to deal with competition.
Microsoft had hired Mustafa Suleyman, co-founder of Google DeepMind to head its AI unit. It had also employed several people from Inflection, which was set up by Suleyman in 2022. Microsoft reportedly paid Inflection about $650 million for the deal. While this deal allowed Microsoft use of Inflection’s AI models, it allowed the latter to pay off its investors.
While assuring full cooperation to CMA during its investigation, Microsoft, continues to maintain that its actions are only promoting healthy competition.
Other partnerships by Microsoft that have come under the scanner include those with OpenAI and Mistral AI.
