Microsoft faces fresh clash with Britain’s competition watchdog over ChatGPT deal

Microsoft CEO Satya Nadella greets OpenAI CEO Sam Altman
Microsoft boss Satya Nadella has overseen the company's recent AI advances, an effort that involves close collaboration with Sam Altman’s OpenAI - Justin Sullivan/Getty Images

Britain’s competition watchdog is facing a fresh battle with Microsoft over its plans to scrutinise the tech giant’s ties to ChatGPT-maker OpenAI.

The Competition and Markets Authority (CMA) said it was seeking industry views on the deal between the US tech companies as it investigates their role in the development of artificial intelligence (AI) technology.

This comes just months after Microsoft attacked the CMA over its initial decision to block the $69bn takeover of gaming company Activision, which was later reversed.

The CMA said it is currently involved in an “information gathering process” as it considers launching a formal inquiry into whether the relationship between Microsoft and OpenAI harms competition in Britain.

Microsoft is a major investor in OpenAI, pledging up to $13bn (£10.3bn) in investment in the business while also providing it with critical computing supplies.

OpenAI launched ChatGPT last year, which has since sparked a surge of interest in AI technology – particularly from businesses.

ChatGPT is capable of answering questions in plain English, while it can also be used to write emails or act as a virtual assistant.

The CMA said Microsoft’s deal with OpenAI included “a multi-year, multi-billion dollar investment, collaboration in technology development and exclusive provision of cloud services”.

The watchdog said it would examine whether Microsoft had “de facto” control over OpenAI.

As a shareholder in OpenAI, Microsoft recently secured a non-voting board seat after directors attempted to oust chief executive Sam Altman in a coup.

Microsoft opposed the move and ultimately helped engineer Mr Altman’s return.

During its previous spat with the CMA, Microsoft accused the regulator of damaging Britain’s appeal to foreign investment.

Relations subsequently improved after the regulator waved through the Activision deal in September.

A Microsoft spokesman said: “Since 2019, we’ve forged a partnership with OpenAI that has fostered more AI innovation and competition, while preserving independence for both companies. The only thing that has changed is that Microsoft will now have a non-voting observer on OpenAI’s Board.”

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