Microsoft’s Partnership With OpenAI Facing Antitrust Scrutiny

Microsoft’s collaboration with OpenAI, the creator of ChatGPT, is currently under antitrust scrutiny in the US and UK, according to the British regulator and media reports. This comes after a recent leadership dispute at OpenAI that resulted in the temporary removal and subsequent reinstatement of CEO Sam Altman. Following these events, Microsoft, a significant supporter of OpenAI, was given a non-voting observer position on the company’s board. This means Microsoft nominees can attend board meetings and access confidential information but cannot participate in voting, including the election of directors.

The UK’s Competition and Markets Authority (CMA) is considering whether to investigate Microsoft’s investment to assess its impact on competition in the UK. The US Federal Trade Commission (FTC) is also reportedly looking into whether the investment might have violated antitrust laws, although these inquiries are said to be in the preliminary stages.

OpenAI, initially a non-profit organisation, established a for-profit subsidiary in 2019, in which Microsoft reportedly holds a 49% stake. However, Microsoft disputed this claim, stating that the details of its agreement are confidential and that it does not “own any portion” of OpenAI but is entitled to a share of profits.

Microsoft has committed over $10 billion to support OpenAI, positioning itself as a key player in the race for AI dominance alongside Alphabet’s Google. The recent changes in OpenAI’s governance, involving Microsoft, have triggered regulatory scrutiny, with calls for antitrust authorities to investigate and potentially intervene to ensure fair competition in the rapidly evolving AI sector.