Microsoft questioned

The UK’s Competition and Markets Authority (CMA) has launched a “phase 1” antitrust inquiry into Mircosft’s $650M deal with Infleciton AI, which also saw them hire most of their key staff, concerned that it will affect fair competition.

Why is the CMA investigating Microsoft?

This inquiry comes just four months after Microsoft launched its new consumer AI division, and hired the two Inflection co-founders–Karén Simonyan and Mustafa Suleyman–to run it, who then proceeded to bring most of their core team with them.

This move raised concerns within the CMA about a new Merger and Acquisition (M&A) approach big tech companies (like Microsoft) are undertaking, which sees them strategically invest in startups and then hire their talent (often referred to as a quasi-merger), to avoid the regulatory scrutiny a traditional M&A deal would likely trigger.

What happens next?

The CMA now has 40 days, until September 11th, to complete their initial ‘phase 1’ inquiries (which involves asking third parties for comments) and decide whether Microsoft’s hiring of Inflection staff counts as a “merger” and if it’s likely to damage fair competition in the UK.

If they find that it does, they’ll move into ‘phase 2’ which will be a more in-depth formal probe, which can often take around 6 months to complete, and could result in Microsoft losing their key hires which will affect their AI goals and ambitions.

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