The
Competition and Markets Authority (CMA) has published an invitation to comment on
a partnership arrangement between Microsoft Corporation (Microsoft) and OpenAI,
Inc (OpenAI).
Microsoft
has a long-term, multi-billion partnership with OpenAI. As part of the arrangement Microsoft and
OpenAI can independently commercialise resulting AI technologies and Microsoft
is the exclusive provider of cloud services to OpenAI.
In
the wake of a chaotic week for OpenAI between Sam Altman’s firing and re-hiring
as CEO, the CMA notes that there have recently been developments in the
governance of OpenAI, some of which involved Microsoft.
It
is, therefore, considering whether it is or may be the case that the
Microsoft/OpenAI partnership, or any changes to that partnership, have resulted
in the creation of a relevant merger situation under the merger provisions of
the Enterprise Act 2002.
If
the CMA finds that as relevant merger situation exists, it will examine whether
the creation of that situation may be expected to result in a substantial
lessening of competition within any market or markets in the UK for goods or
services.
The
CMA invites comments by 3 January 2024, in advance of launching a potential
formal Phase 1 merger investigation.
M&A
involving generative AI could lead competition authorities to investigate these
transactions. In a dynamic market, markets may be more difficult to define and
effects more challenging to anticipate.
The
development is timely following my appearance yesterday at a ThoughtLeaders4 Disputes | TL4D webinar on
the intersection of generative AI, law, and education! OpenAI's ChatGPT is
stirring discussions among legal professionals.
https://www.gov.uk/government/news/cma-seeks-views-on-microsofts-partnership-with-openai
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