The United Kingdom’s top antitrust watchdog on Friday said it would investigate whether Microsoft’s partnership with OpenAI was essentially a merger. Bloomberg later reported that the United States’ Federal Trade Commission is doing the same, although the agency hasn’t opened a formal probe.
The technology behemoth has invested $13 billion in OpenAI’s for-profit arm. Since it does not own a controlling stake, the deal was not notified to trustbusters for review.
It may seem like the day-to-day at OpenAI hasn’t changed much: Altman is back, and the company will continue to operate as before. But Microsoft’s role in the tumult - OpenAI employees had threatened to join the firm - and new board seat, albeit non-voting, indicate its increased influence. U.S. merger enforcers, when debuting new antitrust guidelines in July, singled out minority investments as potentially problematic. More fundamentally, any AI startup can only exist with a huge expenditure of computing resources, which are controlled by Microsoft and its tech giant kin. What trustbusters may do to combat this power is unclear. But OpenAI’s tighter embrace from its backer will bring these concerns to the fore.(By Anita Ramaswamy)
Follow @Breakingviews on X
Capital Calls – More concise insights on global finance:
EU’s AI rules look best for those in the middle read more
Anglo American’s reshuffle can go further read more
KKR’s smart meter swoop is well-timed read more
BAT’s smokeless future is clouded in smoke read more
Nio is on the long road to trimming losses read more
