July 17, 2024 – The UK’s Competition and Markets Authority (CMA) announced on July 16th that it is investigating Microsoft’s hiring of several former employees of Inflection AI and the arrangements made with the company. The regulatory body has expressed concerns that these actions could potentially lead to a “substantial lessening of competition.”
In its statement, the CMA revealed that the deadline for making a first-phase decision is September 11th, when it will declare whether the case will proceed to a second phase of deeper investigation.
Earlier this year in April, the CMA had solicited public feedback on a series of transactions between tech giants and AI startups, including deals between Microsoft and Inflection AI, Microsoft and Mistral AI, as well as Amazon and Anthropic. Notably, Mistral AI recently raised 643millioninfunding,valuingthecompanyat6 billion.
In March, Microsoft declared the hiring of Inflection AI co-founders Mustafa Suleyman and Karén Simonyan. Suleyman has been tasked with leading Microsoft’s consumer artificial intelligence division. Furthermore, Microsoft acquired a majority of Inflection AI’s staff and stated it would pay approximately $650 million in licensing fees to secure the company’s technology.
As part of these organizational changes, Suleyman now oversees teams dedicated to Copilot, Bing, and Edge at Microsoft.
According to reports in June, the U.S. Federal Trade Commission (FTC) is also examining whether the transactions between Microsoft and Inflection AI were deliberately structured to circumvent government scrutiny.
It’s worth noting that Microsoft has invested in several AI startups in recent years, including a significant investment in OpenAI, the creators of the chatbot ChatGPT.
