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Microsoft’s $13bn investment in OpenAI has been cleared by the UK’s competition regulator, weeks after the artificial intelligence start-up struck a new partnership with SoftBank that reduces its reliance on the US big tech company for its computing infrastructure.
The Competition and Markets Authority on Wednesday said the deal did not qualify for a more formal investigation into whether the partnership was a merger between the two companies. It determined that there had not been any “change of control” that gave Microsoft “de facto control over OpenAI”.
The regulator added that “recent developments in the partnership which reduce OpenAI’s reliance on Microsoft for compute” — an apparent reference to OpenAI and SoftBank’s new $100bn AI infrastructure project Stargate — “particularly” contributed to its decision.
However, Joel Bamford, the CMA’s executive director for mergers, said the decision “should not be read as the partnership being given a clean bill of health on potential competition concerns”. The CMA’s decision noted that Microsoft still exerted a “high level of material influence” over OpenAI’s commercial policy.
The announcement comes as the CMA has faced intense scrutiny in recent months from the government to show it is promoting growth and not stifling innovation in the UK. Ministers abruptly ousted the agency’s chair Marcus Bokkerink last month, replacing him with the former head of Amazon UK, Doug Gurr.
The CMA announced in December 2023 that it was gathering information about whether to launch a formal investigation into the Microsoft deal, and was followed by a similar probe by the EU.
Last June, the EU cleared the tie-up under its merger control rules. However, Margrethe Vestager, the bloc’s then competition chief, warned at the time that the “story is not over” as the EU examined other aspects of the two companies’ relationships, in what was seen as a potential prelude to an antitrust probe.
In a market study from January 2025, the Federal Trade Commission said deals such as Microsoft’s and OpenAI’s raised antitrust concerns.
“[P]artnerships by big tech firms can create lock-in, deprive start-ups of key AI inputs, and reveal sensitive information that can undermine fair competition,” former FTC chair Lina Khan said then.
Microsoft is the largest investor in OpenAI, having backed the company with more than $13bn. The original deal granted Microsoft an exclusive licence to OpenAI’s AI research in return for Microsoft offering OpenAI the supercomputing resources it needs to build powerful AI models.
But the companies’ relationship has become more strained over the past 18 months, with both reducing their reliance on each other for AI systems and the costly infrastructure that powers them.
The CMA was the first regulator to look into Microsoft’s ties to OpenAI after the start-up’s board ousted chief executive Sam Altman in November 2023 only to rehire him a few days later. Microsoft, which had pushed for Altman’s return to the helm of the company, ended up taking a non-voting observer seat on OpenAI’s board following the incident.
The CMA said it was initially concerned the partnership could give Microsoft control over OpenAI’s business. Following regulator scrutiny, Microsoft also gave up its observer seat on OpenAI’s board in 2024.
“Our OpenAI partnership and its continued evolution promote competition, innovation, and responsible AI development, and we welcome the CMA’s conclusion, after careful and prudent consideration of the commercial realities, to close its investigation,” said Microsoft.
OpenAI said it “operates in a highly competitive and rapidly evolving industry, and we are focused on developing AI that is safe and beneficial for everyone”.
In a LinkedIn post, Bamford acknowledged the “exceptionally extended” length of time between the start of the CMA’s review and Wednesday’s decision, at a time when the agency was under pressure from ministers and industry executives to move more quickly and predictably in its merger reviews.
He blamed the complexity and changing nature of partnerships between big tech groups and AI start-ups for the delay.
“We are not blind to the length of time that this investigation has taken — particularly given the reforms we have launched recently which will considerably speed up and streamline the UK mergers process,” he said. “We know pace matters to business confidence and investment.”
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